The Real Story of the Obama Mortgage Deal

In a July 2nd story, the Washington Post reported on the details of Barack and Michelle Obama's mortgage deal, suggesting a preferential interest rate obtained by the lender, the Northern Trust of Chicago.  Conservative writers (example here) were quick to jump on the story and assert Obama had obtained an unreported and prohibited gift per Senate rules.,

The Washington Post ombudsman, Deborah Howell, published a follow-on piece today.  As it turns out, the so-called "sweetheart deal" was not the juicy story those conservative writers had hoped.

I asked the advice of my longtime financial adviser and CPA, Stephen B. Smith of Williams-Keepers in Columbia, Mo., only because Smith is about the most Republican Republican I know when it comes to financial matters. And he's no Obama fan. After reading the article, he said: "No story. It's a very normal mortgage gotten by normal people, not even a sweetheart deal. The story quotes average rates. Averages have a range in this context. The rate charged is probably within the range of others in the sample who had no reason to get a favor. That is not a rate to shock the conscience."

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.