On his radio show, Fox News' Sean Hannity touted a Washington Examiner blog post claiming that Sen. Barack Obama got a "discount" and a "Countrywide-like sweetheart mortgage deal" from Northern Trust for the purchase of his house. But the Examiner's only source for that claim in the blog post was a Washington Post article that did not cite any evidence that the interest rate Obama received was in any way out of the ordinary or in any way the result of preferential treatment.
On the July 7 broadcast of his ABC Radio Networks program, Fox News' Sean Hannity claimed that, "shortly after being sworn in as a U.S. Senator in January 2005," Barack Obama "got what The Washington Examiner is calling a 'Countrywide-like sweetheart mortgage deal' on the Georgian mansion that he bought in an upscale Chicago neighborhood." Hannity then read from a July 2 post on the Examiner's Right Side Politics blog titled, "Obama's Countrywide-like sweetheart mortgage deal" by conservative blogger Dan Spencer. Spencer claimed that Obama received a "discount" and a "sweetheart mortgage deal" from Northern Trust in Illinois. However, the only source Spencer cited for the claim that Obama received a "sweetheart mortgage deal" was a July 2 Washington Post article which, as Media Matters for America noted, did not cite any evidence that the interest rate Obama received was in any way out of the ordinary or in any way the result of preferential treatment.
To finance his new mansion, Obama secured a $1.32 million loan from Northern Trust in Illinois. Obama received a discount on the loan:
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. 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.
Compared with the average terms offered at the time in Chicago, Obama's rate could have saved him more than $300 per month.
So who cares? Perhaps you should. Joe Stephens explains why in the Washington Post:
But amid a national housing crisis, news of discounts offered to Sens. Christopher J. Dodd (D-Conn.), chairman of the banking committee, and Kent Conrad (D-N.D) by another lender, Countrywide Financial, has brought new scrutiny to the practice and has resulted in a preliminary Senate ethics committee inquiry into the Dodd and Conrad loans.
Within Obama's presidential campaign organization, former Fannie Mae chief executive James A. Johnson resigned abruptly as head of the vice presidential search committee after his favorable Countrywide loan became public.
Driving the recent debate is concern that public officials, knowingly or unknowingly, may receive special treatment from lenders and that the discounts could constitute gifts that are prohibited by law.
"The real question is: Were congressmen getting unique treatment that others weren't getting?"
Obama is spinning his sweetheart mortgage deal as the lender competing for Obama's business:
Obama spokesman Ben LaBolt said the rate was adjusted to account for a competing offer from another lender and other factors.
The Obama campaign called the rate "consistent with Northern Trust policies, and it reflected the base rate set for that period discounted to address the competition for the account and other opportunities, such as personal financial services, that the relationship would bring to Northern Trust."
As Media Matters noted at the time, while the Post reported that the Obamas received a "discount" and that their interest rate was "below the average for such loans at the time in Chicago," the article also quoted a vice president of Northern Trust saying "the rates offered to Obama were 'consistent with internal Northern Trust rates at that time.' " Indeed, the very concept of an "average" rate means that a substantial number of loans would have been at interest rates below the average level, as well as a substantial number above that level, and does not suggest that rates below average -- if in fact the Obamas received a below-average rate -- resulted from preferential treatment.
From the July 7 edition of ABC Radio Networks' The Sean Hannity Show:
HANNITY: All right. Now -- oh, by the way, how many of you know that Barack Obama, shortly after being sworn in as a U.S. Senator in January 2005, he got what The Washington Examiner is calling a "Countrywide-like sweetheart mortgage deal" on the Georgian mansion that he bought in an upscale Chicago neighborhood.
To finance his new mansion, Obama secured a 1.32 million dollar loan from Northern Trust in Illinois. Obama received a discount on the loan. He locked in an interest rate of 5.625 percent on a 30-year fixed, below the average for loans at the time in Chicago. Now the loan is what they call a "super, super jumbo loan." They paid no origination fee, no discount points as some consumers do to reduce their interest rates, and compared with the average terms offered at the time in Chicago, that rate saved him more than $300 per month.
I mean, you know, Chris Dodd, he gets a sweetheart deal. Kent Conrad, another. You know all these Countrywide financial guys, you know, resulted in a preliminary Senate ethics inquiry into the Dodd and Conrad loans. But you know what, folks? What am I? I'm forgetting he's the agent of change. He's different. He's above all of this. After all, he used to be a community organizer.