Coming on the heels of the Countrywide loans, I can understand why someone would think it worthwhile to look into the mortgage terms of various politicians’ loans. But when you find nothing, you really shouldn’t try to create something of it. It makes you look dumb.
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. 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.
The usual suspects are huffing and puffing, but ordinary people who have actually applied for mortgage loans will recognize a major problem with this story: there are many factors that go into a home loan. Like… ummm… credit scores. And…. occupational security. And income to debt.
As Nate points out at FiveThirtyEight.com:
According to current rate quotes from myFICO.com, a borrower with very good credit can expect a mortgage rate about 30 basis points better than someone with pretty good credit, and a borrower with excellent credit can expect about a 50 basis point discount.
Speaking from recent personal experience, that looks about right.
Presumably WaPo also knew this, but that wouldn’t fit the storyline. Unfortunately, omitting such details, while simultaneously injecting other controversies into the article, makes this a transparently biased, and extraordinarily stupid, story.
The MSM really is pathetic lately.