Campaign, bank say Obama's mortgage proper

CHICAGO, July 2 (UPI) -- Campaign officials and the financial institution involved say terms Sen. Barack Obama, D-Ill., received on his Chicago home mortgage were proper.

Obama, the likely Democratic presidential nominee, received a discount when he financed the purchase of a $1.65 million Georgian mansion in the tony Hyde Park neighborhood in 2005 with a $1.32 million loan from Northern Trust of Illinois, The Washington Post reported Wednesday. Obama paid no origination fee or discount points.

Mortgage interest rates at that time averaged between 5.93 percent and 6 percent, the Post said. Obama locked in at 5.625 percent for the 30-year, fixed-rate mortgage.

Obama spokesman Ben LaBolt said the rate was adjusted to match a competitive offer elsewhere, among other things.

His home loan has come under scrutiny in the midst of a national housing crisis and news that discounts were offered to Sens. Christopher J. Dodd, D-Conn., and Kent Conrad, D-N.D, by Countrywide Financial. The Dodd and Conrad loans resulted in a preliminary Senate ethics committee inquiry.

Northern Trust said it has no formal program to provide discounts to public officials but can consider the borrower's income and occupation. Obama had just been elected to the U.S. Senate and his wife, Michelle, had been promoted to a vice presidency at the University of Chicago Hospitals when they bought the house.

"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."