Obama received rate discount in loan for Chicago mansion

US Republican presidential candidate Senator John McCain and his wife, Cindy, were met by Colombian President Alvaro Uribe (right) upon arriving in Cartagena yesterday for a two-day visit to discuss a free trade pact among other issues. (mauricio duenas/afp/getty images)

WASHINGTON - Shortly after joining the US Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois.

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.

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.

Modest adjustments in mortgage rates are common among financial institutions as they compete for business or develop relationships with wealthy families. But amid a national housing crisis, news of discounts offered to Senators Christopher Dodd, a Democrat from Connecticut and chairman of the banking committee, and Kent Conrad, a North Dakota Democrat, by another lender, Countrywide Financial, has increased scrutiny to the practice and has resulted in a preliminary Senate ethics committee inquiry into the Dodd and Conrad loans.

Within Obama's presidential campaign organization, former Fannie Mae chief executive James Johnson resigned abruptly as head of the vice presidential search committee after his favorable Countrywide loan became public.

Driving the recent debate is concern that public officials, knowingly or unknowingly, may receive special treatment from lenders and that the discounts could constitute gifts prohibited by law.

"The real question is: Were congressmen getting unique treatment that others weren't getting?" associate law professor Adam Levitin, a credit specialist at Georgetown University Law Center, said about the Countrywide loans. "Do they do business like that for people who are not congressmen? If they don't, that's a problem."

Under financial disclosure rules, members of Congress are not obliged to disclose debts owed to financial institutions for personal residences.

Last week, during debate on a bill to help homeowners caught in the foreclosure crisis, members of the Senate ethics committee proposed an amendment to require that lawmakers disclose their mortgage lenders and terms in financial forms starting next year.

WASHINGTON POST

NRA ads to portray Obama as threat to gun owners
Buoyed by last week's Supreme Court decision striking down the ban on handguns in Washington, D.C., the National Rifle Association is planning to spend millions to ensure that John McCain keeps the White House in Republican hands.

According to Politico, the NRA intends to spend some $40 million over the next four months, including $15 million devoted specifically to portraying Obama as unfriendly to gun owners.

"Our members understand that if Barack Obama is elected president, and he has support in the Senate to confirm antigun Supreme Court nominees, [the District of Columbia v. Heller decision] could be taken away from us in the future," Chris Cox, who leads the NRA's political arm, told Politico, a website that covers political news and newsmakers.

Obama's take on gun rights is essentially that the same rules aren't appropriate in all settings. While an urban municipality plagued by violence should be able to enact strict gun laws, he says, gun enthusiasts in rural states should be able to use and enjoy their firearms.

Obama's record on the issue is somewhat fuzzy. Running for state Senate in the 1990s, Obama indicated on a questionnaire that he supported a handgun ban, but he has since disavowed that, blaming his staff for the declaration.

The NRA isn't buying it.

"During the primaries, Obama tried to hide behind vague statements of support for 'sportsmen.' " the group says on its website. "But his real record, based on votes taken, political associations, and longstanding positions, shows that Barack Obama is a serious threat to Second Amendment liberties."

SCOTT HELMAN

Online band contest aims to boost voter registration
Rock the Vote and MySpace have announced a contest that promises to be a mash-up of a League of Women Voters registration drive, a new-school battle of the bands, and American Idol.

Rock the Vote, a nonpartisan group aimed at using pop culture to drive young voter participation, and MySpace, the social networking website, are holding an online voter registration competition for bands. The band that registers the most voters through Rock the Vote's registration tool on MySpace will have a chance to win a pair of Gibson guitars and to perform at Rock the Vote's Ballot Bash concert at the Democratic National Convention in Denver.

The contest started yesterday and ends Aug. 14, at which time the top three finalists will be featured online. Fans will choose the winner the next day.

LISA WANGSNESS