Washington Post: Obama got discount on mortgage for his mansion

First Senator Christopher Dodd (D-CT), then Senator Kent Conrad (D-ND), now the king of all Democrats, Barack Obama, has a mortgage problem. By the way, Obama's hometown, Chicago, has been hit hard by the housing bubble.

The Washington Post's Joe Stephen has the scoop:

Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion (pictured above) in an upscale Chicago neighborhood. To finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois. The freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago.

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The loan was unusually large, known in banker lingo as a "Super Super Jumbo." Obama paid no origination fee or discount points, as some consumers do to reduce their interest rates.

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Compared with the average terms offered at the time in Chicago, Obama's rate could have saved him more than $300 per month.

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The Obamas had no prior relationship with Northern Trust when they applied for the loan. They received an oral commitment on Feb. 4, 2005, and locked in the rate of 5.625 percent, the campaign said. On that date, HSH data show, the average rate in Chicago for a 30-year fixed-rate jumbo loan with no points was about 5.94 percent.

As I noted just yesterday, on the same day the Obamas closed on their mansion, Rita Rezko, wife of since-convicted felon Tony Rezko, purchased the "Rezko lot" strip adjacent to the Obama property, which is just behind the "For Sale" sign. In what I believe was a backhanded loan, six months later, the Obamas purchased a 10 foot parcel of the lot. Obama denies it, but my suspicion is that as Barack Obama's book royalties rolled in, the Obamas would slowly peck away at the Rezko lot.

But the Chicago Tribune found out about the deals in late 2006.

UPDATE 8:40 AM CST:

The Chicago Tribune's Swamp Blog adds its take, Frank James is hedging his bets on the Post story, but add's this analysis:

Still, coming as it does after all the disclosures of the erstwhile Friends of Angelo program at Countrywide Financial which apparently benefited some members of Congress and at least one former member of the Obama campaign team, James Johnson, who headed up Obama's vice presidential selection process until stepping down because of the scandalette, this story about Obama's mortgage is certainly worth knowing about.

Look for an Obama spokesperson, but not Obama of course, to dismiss the mortgage story.

Related post:

Revolt at the polls against the Cook County corruption tax called by Democratic reformer (with Rita Rezko)