Touting Wash. Post article, Politico's Vogel baselessly suggested that Obama got a "sweetheart mortgage"

››› ››› ERIC HANANOKI

On a Hardball segment concerning the chances that Sen. Barack Obama would select Sen. Chris Dodd (D-CT) as a running mate, Ken Vogel said: "[L]et's not forget that Obama, too, was the subject of a story in The Washington Post, actually, suggesting that he got a good deal on his mortgage. So unless they want an all-sweetheart-mortgage ticket, I think this is probably not the way to go." In fact, the Washington Post article provided no evidence that Obama had received preferential treatment in obtaining his mortgage.

Citing a July 2 Washington Post article that has been criticized as unfair and misleading, the Politico's Ken Vogel baselessly characterized Sen. Barack Obama's mortgage with Northern Trust in Illinois as a "sweetheart mortgage." In a discussion on the July 11 edition of MSNBC's Hardball about the chances that Obama would select Sen. Chris Dodd (D-CT) as a running mate, guest host Mike Barnicle said that Dodd "had the little mortgage flap a couple of weeks ago." Vogel said: "[L]et's not forget that Obama, too, was the subject of a story in The Washington Post, actually, suggesting that he got a good deal on his mortgage. So unless they want an all-sweetheart-mortgage ticket, I think this is probably not the way to go." But as Media Matters for America and numerous others noted, the Washington Post article provided no evidence that Obama had received preferential treatment from Northern Trust. Indeed, Vogel's own Politico colleagues Ben Smith and Mike Allen wrote that the Post's story was "padded" and that "there's no evidence that they [the Obamas] dealt with the bank through a special side door for powerful people like the one Countrywide maintained."

While the Post reported that the interest rate the Obamas received was "below the average for such loans at the time in Chicago," the article also quoted a vice president of Northern Trust saying that "the rates offered to Obama were 'consistent with internal Northern Trust rates at that time.' " As Media Matters noted, the very concept of an "average" rate means that a substantial number of loans would have been made 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.

In a July 13 column headlined "More Story Than a Loan Merited," Post ombudsman Deborah Howell wrote:

Keith Gumbinger, vice president of HSH Associates, was quoted in Stephens's story as saying that Obama "did better than average. It's a good deal." Gumbinger also told me that the rate "was not out of the boundaries" of what other borrowers were offered. "Frankly, any reasonably savvy borrower should have been able to do better than average. That context was missing" from the story, he said.

[...]

Holden Lewis, a reporter who covers mortgages for Bankrate.com, said, "I realize that the story annoyed some people, but this was a case of an enterprising reporter asking a question that had to be asked and who got it answered thoroughly. I wish I had written the story."

Would he have done anything differently with the story? "I would have stressed that the mortgage rate was normal for someone who has $3 million invested with the brokerage lending the money. The money they invested was more than the mortgage, so they are incredibly good credit risks."

Howell concluded that "the story had news value. [Sen. John] McCain doesn't have any mortgages, due to his wife's wealth; that's not uncommon for rich people, I'm told. Still, the story had a negative cast to it. It also lacked the important context that other wealthy and savvy borrowers could have done as well under similar circumstances" [emphasis added].

In contrast to Vogel's assertion, Smith -- senior political writer for the Politico -- wrote: "[W]hile the GOP is making much of it [the Post story] this morning, it seems well short of the Countrywide story: There's no evidence that they [the Obamas] dealt with the bank through a special side door for powerful people like the one Countrywide maintained." Allen, Politico's chief political writer, wrote of the story: "The tipoff that this story is padded -- and that they weren't sure it was news -- is that it includes irrelevant quotes about Countrywide, which was not the Obama lender."

Similarly, Columbia Journalism Review's Justin Peters wrote that "there doesn't seem to be much of a story here. ... [T]he end result was a story that raises more questions than it answers. And the questions have more to do with the Post's news judgment than they have to do with Barack Obama."

From Howell's July 13 column:

Readers also objected to the story's prominent mention of controversial mortgage loans given two other senators and a prominent Obama supporter by the troubled Countrywide Financial Corp. James Duemer of Potsdam, N.Y., said that "the inclusion of information in the story about Countrywide is irrelevant: the Obamas got their loan from Northern Trust. The rhetorical purpose of the details about Countrywide is to create an appearance that the Obamas got a special deal because Mr. Obama is a senator."

Of the seven financial and mortgage experts I talked to, three were former reporters. The reporters thought the rate was low enough to merit a story. Financial experts who weren't journalists thought the rate was normal and something that any other wealthy, smart borrower might have gotten.

Keith Gumbinger, vice president of HSH Associates, was quoted in Stephens's story as saying that Obama "did better than average. It's a good deal." Gumbinger also told me that the rate "was not out of the boundaries" of what other borrowers were offered. "Frankly, any reasonably savvy borrower should have been able to do better than average. That context was missing" from the story, he said.

The story quoted an Obama spokesman as saying that the rate was lower because of a competing offer. It is common for borrowers to shop for the best rate. The story noted that the Obamas had enjoyed a surge in income. This came through higher-paying jobs for both and a $2.27 million book deal for him.

Northern Trust Vice President John O'Connell said in an interview, "This was not a unique situation -- it is common and consistent business policy which shows no favoritism toward politicians, celebrities or any public figures. His rate was based on the fact this is a client who could potentially bring us more personal business." The Obamas since have invested about $3 million with Northern Trust, the Obama spokesman said.

[...]

Readers deserve to know everything pertinent The Post can find out about Barack Obama and John McCain's finances. In that context and in the context of the home mortgage crisis, the story had news value. McCain doesn't have any mortgages, due to his wife's wealth; that's not uncommon for rich people, I'm told.

Still, the story had a negative cast to it. It also lacked the important context that other wealthy and savvy borrowers could have done as well under similar circumstances.

From the July 11 edition of MSNBC's Hardball with Chris Matthews:

BARNICLE: Ken, Chris Dodd, senator from Connecticut, he's being vetted. He said he's being vetted. He had the little mortgage flap a couple of weeks ago. Put Chris Dodd in the ranks. Tell me where he stands.

VOGEL: Well, I'm surprised to even to hear that he's being vetted, because I don't think he would bring a lot to the ticket. I think that mortgage story that you mentioned is a significant impediment. Remember, Obama is really reaching out, trying to show that he understands people's pain going through this economic recession more than John McCain does. This story, the sweetheart deal on the mortgage, certainly doesn't help.

And let's not forget that Obama, too, was the subject of a story in The Washington Post, actually, suggesting that he got a good deal on his mortgage. So unless they want an all-sweetheart-mortgage ticket, I think this is probably not the way to go.

BARNICLE: But Chris, he has experience. He's Catholic. He's a good campaigner. I mean, you know, the whole thing about he wins a state or brings a state to the candidate, that's, I think, overrated. Chris Dodd -- not a bad candidate for that ticket.

CILLIZZA: Well, you forgot the important thing, Mike, which is that he's from Connecticut, like me. And we all know that there's good stock coming out of Connecticut.

But yes, I think he does. I think Ken is right. You know, I don't think Dodd is ultimately gonna to be the guy.

But I do -- a thing that a lot of people forget about, he's a former chairman of the Democratic National Committee. This is a guy who has his fingers in a lot of pots, can raise a lot of money, not that Barack Obama might need it. But I think he's considered. I don't think ultimately he's in that final two or three, though.

BARNICLE: And he also has great hair, like [Gov.] Tim Pawlenty [R-MN].

Charlie Crist [R], governor of Florida, for John McCain. He just got married.

Network/Outlet
MSNBC
Person
Mike Barnicle, Ken Vogel
Show/Publication
Hardball, Politico
Stories/Interests
Barack Obama, 2008 Elections
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