Redstate

The Obamas got their mortgage from Northern Trust. By curious coincidence, one of Michelle’s old friends joined that bank and is now in a particularly important position when it comes to information about the mortgage.

Kelly King Dibble has a long time friendship with Michelle Obama from the time they both worked at the Chicago Planning Dept, and she also worked for Rezko. Dibble went on to head the Illinois Housing Development Authority under Governor Blagojevich, with Rezko help. Dibble also hosted a fund raiser for Obama. More on Dibble here.

Dibble also was mentioned during the Rezko trial by Ali Ata. Dibble was a regular visitor to Rezko’s office while heading the IHDA (which is based in Chicago). She also crossed Rezko when she refused to hire a Rezko relative.

Dibble later resigned from the IHDA in Jan 2007 to take a job with Northern Trust, and is now Senior Vice President Public Affairs. So if Northern Trust is asked about the loan, Dibble will be in charge of framing the answers.

This is from American Thinker's article at... http://www.americanthinker.com/2008/07/the_obamas_and_their_mortgage_1.h...

would come back to haunt Obama. The Chicago-style political and social connections probably secured Obama this loan.

Northern Trust does negligible mortgage business - and they have not taken any write offs of the sorts of the other banks and lenders you read about.

Norther Trust is primarily an asset manager - their bread and butter is managing the fortunes of wealthy individuals or families. I don't really find it suprising that Northern Trust would throw a sweetheart mortgage deal to the new millionaire in hopes of landing the investment management business for his new fortune (and I fully expect they won the busines, as NTRS has a good rep as an asset manager).

So probably nothing improper with Northern Trust using an underpriced mortgage loan as a loss leader to win more profitable investment business.

But you do make a couple of interesting points wrt Dibble - it shows the extent of Rezko's tentacles in the Chicago business/political scene, and it also highlights another one of these "VP of Public Affairs" type positions, similar to what Michelle O makes $300K as at U of C Hospitals. It's still not clear to me what these roles do and why they pull down mid-six figure salaries. But its probably not hard to connect the dots.

The Post article confirms that they now manage more than $3mm of the Obama family's assets.

the important part of the story is that they were taking the average of loans between 417k and 650k. Obama was getting a loan for 1.32 million. In fact, the story didn't have an average because those loans are rarely done and so there are no averages. That said, those loans carry a much higher rate than a loan for 650k. Obama got an enormously good deal.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

No matter what the subject, there is always someone who does it for a living that posts here. It's nice to get some confirmation that this is an unusual transaction from someone who is in the mortgage business and in Chicago area no less!

Thanks Mike.

Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.

I understand a California congresswoman is about to get snared in the subprime mess along with Dodd and Conrad. Your expertise will be helpful if this develops fully.

keep in mind I am going off memory. Here is what the article says.

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.

Jumbo loans are for amounts up to $650,000, but the Obamas' $1.32 million loan was so large that few comparables are available. Mortgage specialists say that many high-end buyers pay cash.

I am not going to search for rates in January of 2005 because that is ludicrous. I will assume they are accurate in reporting that JUMBO was just less than 6%, though I am skeptical because rates had moved up significantly by then. In any case, the important paragraph is the second one. The rates they are averaging end at about 650k. His loan amount is 1.32 million. A bank takes on a massive risk when they approve such an enormous loan amount. As such, like I said what a bank does is it puts the loan through a large adjustment and in layman's, again, it means the rate is much higher. (to account for the added risk)

If a regular jumbo was 6%, and that's what they say was the average, then his loan was likely near 6.5%. A bit less than my earlier estimation though still significantly higher than the rate he got.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

again, when the Post was comparing averages they were taking loans of up to 650k. His loan was for 1.32 million. That is a significantly higher risk. Fico scores can lower your rate but keep in mind that in 2000 he was nearly broke. There is nothing to say that his fico was necessarily that high.

I am in the business, and there is no way anyone would have gotten a rate nearly that low on such a loan amount in 2005.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

in Chicago (yes, local and regional rates vary), his overall debt to income ratio, etc., you can't say he got a sweetheart deal. Maybe he did, but this story is innuendo without fact and makes our side look silly. Who knows, perhaps politically this has legs and we should talk it up but I'm just not good at that.

"A person's occupation and salary are two factors; I would expect those are two things we would take into consideration," said Northern Trust Vice President John O'Connell. "That would apply to anyone seeking to get a mortgage at Northern Trust." He added that the rates offered to Obama were "consistent with internal Northern Trust rates at that time."

"The bottom line is, this was a business proposition for us," he said. "Our business model is to service and pursue successful individuals, families and institutions."

I am not buying it. The terms they offered to Obama meant this loan wasn't sellable. No bank would buy such a loan because it was so undervalued. As such, Northern Trust wants everyone to believe that they discounted him up to a full percentage point on a million plus loan in order to get his portfolio which at the time was about the same. That is not a wise business proposition. I think Northern Trust is using fancy business terms to spin.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

Obama could easily win this election. If he does (and very likely even if he doesn't) he will be worth tens of millions someday - just look at what Clinton's done post-presidency.

Obama will probably start some bogus Hundred Million Dollar global giving fund like Clinton did as well.

Northern Trust now has their foot in the door for the asset management on all of that money.

You know what a couple of points on a $1MM mortgage is compared to the money they can make off of managing Obama's current and future fortunes?

Chump change.

was significantly lower than anyone would have gotten. I am in the business, and it is pass fail. If your FICO score is high you might receive a little lower rate. It isn't as though if your DTI is 10% you would get a lower rate than if your DTI (debt to income) is 35%. That isn't how it works.

The reality is that 5.625% was significantly lower than any rate on such a mortgage anywhere at the time. I estimate such a mortgage would have netted roughly 6.5%. He got 5.625%. I suspect that a loan of less than 417k would have netted 5.625% at the time. He was getting the same rate on 1.32 million that the average joe would have gotten on 417k. That is quite the sweetheart deal.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

I priced out his loan today. First, 80% is no longer available but the market has changed. Second, rates in the 8's, still cost the broker money and a lot. In fact, on such a loan, I can't even find a rate that won't cost me 3% which means it would cost the borrower 3%. Now, times have changed, but I don't believe they have changed that much.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

It seems that the Northern Trust offered a slightly favorable deal as part of a relationship play that eventually netted $3mm in assets under management from Obama. I also work in banking, though my job is not on the retail or asset and wealth management side. However, it is common practice for us to bundle some bank services at a loss in order to gain other business that yields a higher profit margin. It seems like a reasonable deal to me but I don't work for NT.

The bottom line is that I think this story is 90% speculation and 10% fact. It's one of those stories that says "I don't have all the facts, but I can write this so it appears like there is a story here." I think it's irresponsible journalism and even though the MSM usually attacks our side disproportionately, I don't like it when it does it to anyone.

will get some consideration if you bundle assets and certainly a lot of assets. What I am saying is that in estimation, his deal wasn't merely a savings of a quarter or .375%. In my estimation it was near a full percentage point. A bank simply wouldn't take such an enormous loss for any reason.

Again, the important part of this story is that the average of a jumbo loan was about 6% at the time. He didn't get a jumbo loan. He got a loan much higher than that. That is an enormous extra risk especially if the bank doesn't make mortgages a major portion of their portfolio. What Northern Trust is attempting to say is that their bank, which doesn't carry many mortgages, was significantly discounting a major loan, in order to get investment business. That means their risk was even higher. If they already don't have a large loan portfolio, then this loan is an even bigger part of their portfolio.

Look, discounting a loan a quarter of a percent to get business, three eighths, maybe, but in my estimation this discount was near a full percentage point. Doing this would carry far too much risk in order to get the business.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

To Al Franken, your Senate candidate - right?

Here's the deal, pal - you guys have been whining about the culture of corruption for years while AT THE SAME TIME your top elected officials have been getting sweetheart mortgage deals from the people they are supposed to be regulating. If there was a shred of credibility left in the Democrat party and MSM, there would be an investigation and further reporting, but there isn't, so there won't be.

Keep calling it a non-story - maybe soon you will believe it. The left perfected voter fraud, sweetheart deals and corruption, and there was no reason to believe you had ever stopped.

Obama: Had shady dealings on his real estate transaction and got a "special" deal on the mortgage to support it.

McCain: His wife paid a bill late after it was not sent to the correct place.

Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.

The only way to describe Joe Stephens' article in today's Washington Post, "Obama Got Discount on Home Loan," is to call it an innuendo-ridden piece of thorough-going garbage. It is an explicit work of taint-for-taint's-sake, broadly insinuating wrongdoing on the part of the Democratic nominee, that not only fails to make its case - it mendaciously avoids even mounting a case in the first place. The facts are these: some time after joining the U.S. Senate, the Obama's secured a loan from Northern Trust in the amount of $1.32 million dollars to purchase a $1.65 million dollar home. The Obamas' received an interest rate of 5.625 percent at a time when the average rate in the area was 5.93 percent.

The discounted rate is explained by Obama spokesman Ben LaBolt thusly:

Obama spokesman Ben LaBolt said the rate was adjusted to account for a competing offer from another lender and other factors. "The Obamas have since had as much as $3 million invested through Northern Trust," he said in a statement.
Northern Trust Vice President John O'Connell adds:

"A person's occupation and salary are two factors; I would expect those are two things we would take into consideration," said Northern Trust Vice President John O'Connell. "That would apply to anyone seeking to get a mortgage at Northern Trust." He added that the rates offered to Obama were "consistent with internal Northern Trust rates at that time."

"The bottom line is, this was a business proposition for us," he said. "Our business model is to service and pursue successful individuals, families and institutions."

These explanations should have stopped this story dead in its tracks, because Stephens' has not a shred of evidence on hand to suggest that anything even remotely out-of-bounds occurred in the securing of this home loan. (story by Jason Linkins)

As for the McCains - the tax collector in San Diego says late is late - For 4 years the McCains didn't notice they weren't paying any property taxes? Oh well, I guess that's the kind of fiscal responsibility we can expect from those elitists who own so many houses they can't keep their records straight.

It was sent to the wrong address because the McCains never gave them the new address. Oh, but if it is the "elites" that do it, it's the Post Office's fault. Just imagine if this had happened to the Obamas. You'd be screaming your faces blue. ... I mean red.

if it were McCain who got a good deal on a loan. I, on the other hand am cynical enough to believe that all congressmen who have been in Washington for more than two or three years have been corrupted to some extent, and got some sweetheart deals.

My criteria is not who is the cleanest guy, but which guy will try to steal less of my money for his pet projects.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

"elitists who own so many houses they can't keep their records straight."

The McCain's don't own this house. It's in trust for their aunt (who is probably the beneficial owner, though I haven't verified that). Cindy is the listed trustee for the trust and it's managed by a bank. The bank didn't receive the tax bill so they didn't pay it until it was brought to their attention. Yes, someone screwed up in not notifying the county that they should send the bill to the bank instead of to the aunt. The McCains received no monetary benefit from this screwup.

That's hardly in a league with making a shady real estate deal with a convicted felon and getting a sweetheart mortgage to seal the deal. Obama was the beneficiary of these transactions.

Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.

First, there are no McCainS involved here. John McCain has no involvement in this story. The property is owned by a trust that is overseen by Cindy McCain. So she must be the named trustee. No doubt under the trust instrument she is authorized to appoint a trust manager.

Second the trust is actually managed by a bank. This is typical of many trusts. Looks like the city was mailing the tax bills to the elderly aunt who didn't know what to do with them -- and like probably all her bills were paid by the trust so she had instructions to ignore bills sent to the condo address.

Third, obviously, as Cindy McCain's elderly aunt lives in this condo -- this trust was probably established for the benefit of the aunt.

So what we have is a city tax department that is sending tax bills to the wrong address. We have an elderly woman (if she is Cindy's aunt can we assume she is at least in her 70s?) who as beneficiary of the trust probably is not actively involved her bill payments.

Now isn't it nice that when the problem was discovered -- no doubt due to some journalist sniffing around in Cindy McCain finances -- the error comes to light and is immediately corrected.

No where in the story does it say that the condo is owned by Cindy McCain.

All you have pointed out is that some elderly lady missed paying her taxes for 4 years.

Now lets talk about Obama's parking tickets -- seeing as how he was the actual one who received the parking ticket.

M Penny

It doesn't matter who is living in the house. If this had happened to any "regular" person, they'd be in big trouble. See my comment about this in post I just made.

Whose fault was it that the bill was being sent to the wrong address?

As for it being Mrs McCain's so we can't blame Sen. McCain - I don't believe for one second you guys wouldn't be screaming your heads off it had been Mrs. Kerry 4 years ago. Remember how you screamed yourselves silly because she wouldn't release her tax returns (at first), but not a peep when Cindy McCain didn't (at first)?

...to get himself a good deal. It's also not our fault that you need to flail about and scream about a third-party billing glitch in order to make the badthoughts about Obama go away.

Please use your next post to apologize to the other readers for dragging them into your impromptu therapy session. Use no more than five words in doing so: you seem to have a tendency to ramble.

Moe Lane

The Fuzzy Puppy of the VRWC. I've been usurped!