Obama Received Special Mortgage Loan, Report Says

Washington, D.C. (AHN) - The issue of special mortgage loans to public officials came back to hound Sen. Barack Obama (D-IL) on Wednesday after the Washington Post reported that he had received a loan for his $1.65 million mansion in Chicago below current market rates.

Obama received a $1.32 million loan from Northern Trust shortly after he became a senator, the Post said. The 30-year, fixed-rate mortgage had a 5.62% interest rate, below the current 6% at the time in Chicago. The report comes less than a month after former Fannie Mae CEO Jim Johnson was forced to resign from Obama's vice presidential search committee because of a Wall Street Journal story saying Johnson had received more than $7 million in special home loans from controversial lender Countrywide Financial.

That Journal report triggered a wave of others, one of them was by Condé Nast Portfolio, which implicated several current and former public officials, including Senate Banking Committee Chairman Chris Dodd (D-CT) and former Housing Secretary Alphonso Jackson, in the similar VIP loans from Countrywide.

Johnson, Dodd and Jackson were reportedly part of a group called "F.A.O.s" or Friends of Angelo. The name refers to the company's chief executive, Angelo Mozilo.

The Obama campaign has denied that any special treatment had been given to the presumptive Democratic nominee. "Northern Trust does not have a VIP mortgage program. Obama received the same rate as would have been available to anyone with his financial profile and with an offer from another institution," campaign spokesman Ben LaBolt told Politico on Wednesday.

Citing the increased credit-worthiness of Obama at the time, pundits have been lashing out at the Post for "irresponsible journalism." Obama had just joined the Senate at the time and received more than $2 million from his book deal with Random House. His wife Michelle had also just been promoted as Vice President for Community and External Affairs at the University of Chicago Hospitals.

The Washington Post clearly wants to characterize this as a serious story," Steven Benen of the Carpetbagger Report wrote. "As controversies go, this is pretty thin. Obama got a legitimate mortgage, at a competitive rate. He didn't try to conceal anything, and even posted the records related to his house purchase on his website."

Nate Silver of FiveThirtyEight said, "So Obama's rate was 30 basis points better than the average... I would think that the Obamas were exceptionally creditworthy. So indeed, Obama received a 'discount' -- the same discount that any borrower in his position would have received."

But the GOP was similarly quick to pounce on the issue, saying in a news release, "Housing problems continue to plague the campaign following revelations of sweetheart mortgage deal received by Obama." It also reminded voters of Obama's purchase of a portion of land from real estate developer Antoin "Tony" Rezko, who was convicted last month of 16 of 24 corruption counts.