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Mike Pence used campaign funds to pay his mortgage — and it cost him an election

Mike Pence was a young lawyer on the rise, challenging a longtime Democratic congressman in a Republican-leaning Indiana district.

And then, scandal.

Campaign finance records from the 1990 effort showed that Pence, then 31, had been using political donations to pay the mortgage on his house, his personal credit card bill, groceries, golf tournament fees and car payments for his wife.

The spending had not been illegal at the time. But it stunned voters — and undermined Pence’s strategy to portray the incumbent, Rep. Philip R. Sharp, as tainted by donations from special-interest political action committees.

“It was a brazen act of hypocrisy,” said Billy Linville, who was Sharp’s campaign manager. “It was a bombshell, for sure. . . . Without question, he may well have won the election if it had not been for that.”

Pence’s early stumble proved to be a defining moment, prompting a period of public remorse that helped create the wholesome image many Republicans now say makes him an ideal running mate to counterbalance the bombastic Donald Trump.

In the months after that 1990 defeat, Pence waged a statewide apology tour and disavowed negative campaigning. He told a local reporter that using campaign funds for personal expenses had been “an exercise in naivete.”

Pence’s 1990 race also led to key changes in campaign finance policies. Experts say that subsequent rules passed by the Federal Election Commission barring the use of campaign funds for personal needs were the direct result of ethics concerns raised by Pence’s actions.

Jason Miller, a Trump campaign spokesman, said that Pence had done nothing wrong in the 26-year-old episode and that the FEC had determined that he was “100 percent compliant with the law at that time.”

Pence first challenged Sharp in 1988, losing to the then-seven-term incumbent by more than six percentage points. Pence’s line of attack was narrow, mostly focused on the support Sharp received from PAC money.

But that campaign provided early hints that Pence was willing to go for the jugular. One Pence mailer depicted images of a razor blade, white powder and rolled-up cash, and declared: “There’s something Phil Sharp isn’t telling you about his record on drugs.” The brochure left readers hanging until a subsequent page: “It’s weak,” the ad read, using letters formed in powder.

The Washington Post obtained a copy of the brochure from Sharp’s archived papers at Ball State University in Muncie, Ind.

Two years later, Pence tried again, promising to focus on issues Indiana voters cared about and accusing his Democratic opponent of favoring big government. Pence wanted to win so badly that, according to a local newspaper report at the time, he kept a sign in his office that read “congressman in training.”

When news of Pence’s campaign spending broke, his opponent made the most of it. Linville, Sharp’s campaign manager, held a news conference, waved Pence’s campaign finance reports in the air and declared, “If you’re giving money to Mike Pence, you’re paying his mortgage.”

According to FEC documents, Pence spent a total of $12,867 from his 1990 campaign account for personal expenses, including seven installments of his $992 monthly mortgage and his wife’s $222 a month car payment.

Pence was unapologetic at the time, telling reporters that he had taken a 30 percent pay cut to run for office and needed the money. “I’m not embarrassed that I need to make a living,” he said.

“He doesn’t come from a wealthy family. He’s not gentry,” added Pence’s campaign director at the time.

In an interview, Sharp said that argument now makes some sense to him as a way to allow people of modest means to run for office. But, he said, at the time, voters were surprised by the uncommon practice. “This was using other people’s money that was supposed to go for the campaign and not your personal enrichment,” Sharp recalled.

With his election chances in doubt, Pence hit back hard at Sharp.

Phone banks supporting his candidacy used callers who posed as members of environmental groups, telling prospective voters that they had shifted their support from Sharp to Pence because the congressman was selling his family farm in Illinois to become a nuclear waste dump, according to news reports at the time.

Pence also ran a television ad in which a man dressed in stereotypical Arab robes and sunglasses and effecting a fake thick Mideast accent thanked Sharp for ensuring U.S. reliance on foreign oil. The ad drew protests from Arab American groups and was denounced by Indiana editorial boards.

Sharp recalled this week that the ad backfired on Pence, turning off independent voters who Pence would have needed to persuade to abandon the incumbent. “I think I generally was viewed as pretty vanilla, Midwestern,” Sharp recalled. “I think that was viewed as just over the top.”

Pence lost the race by 19 points.

The fallout from the campaign misfire lingered. The Democratic Congressional Campaign Committee had filed a complaint during the campaign with the FEC over personal spending by Pence and three other Republicans who ran for office in 1990.

“These were important cases,” recalled Lawrence Noble, who served as general counsel to the FEC at the time. “They showed that a real problem existed and caused the commission to deal directly” with regulating the use of campaign funds for personal use.

Three weeks after the election, the FEC deadlocked in a 3-to-3 vote over whether to pursue the matter. But the debate led to a larger discussion of the issue of campaign funds and personal expenses.

The Fix's Chris Cillizza explains why Gov. Mike Pence (R-Ind.) was the best vice presidential pick of the candidates Donald Trump was considering. (Peter Stevenson/The Washington Post)

The commissioners had been guided by a legal analysis written by an FEC staff attorney saying that the rules prohibited incumbents but not challengers from using excess campaign funds for personal use. The Pence-friendly opinion was written by Lois Lerner, who years later became an official at the Internal Revenue Service, where she has faced persistent criticism from Republicans over her handling of the tax status of conservative groups.

The commissioners — three Democrats and three Republicans — voted unanimously to begin a process to rewrite rules to ban the personal use of campaign funds by all candidates.

“It was a landmark issue,” recalled Trevor Potter, who joined the commission in 1991 and helped shepherd in the new rules.

Miller, the Trump campaign spokesman, pointed to the FEC’s proceedings to underscore that Pence had done nothing wrong.

“The nonpartisan Office of General Counsel at the FEC reviewed them, and the complaints were dismissed,” Miller said.

Pence, who had incorporated his deep Christian faith into his campaign, also had to deal with the repercussions of his negative efforts, which had hurt his public image.

He offered advice for how would-be candidates could avoid the financial pinch that led him to tap campaign funds for personal expenses: “Don’t quit your day job.”

As for the negative campaigning, he expressed regret. He told the Daily Journal of Franklin, Ind., that the nuclear-waste-dump phone calls had been “a manifestly dumb idea” and declared that “personal attacks are not a legitimate part of a campaign.”

Linville, Sharp’s 1990 campaign manager, recalled that Pence wrote Sharp a lengthy personal letter of apology. In 1991, Pence published an open letter to state residents called “Confessions of a Negative Campaigner” in the Indiana Policy Review that bluntly stated “negative campaigning is wrong.”

He laid out principles that he believed should guide future campaigns. The first: “A campaign ought to demonstrate the basic human decency of the candidate.”

Jose A. DelReal in Muncie, Ind., contributed to this report.

4 common mortgage errors and how to avoid them

Many people make expensive, easily avoidable mistakes when shopping for a mortgage.

“Borrowers who don’t do their homework often end up paying more than they should, and in some cases that extra cost can really hurt,” says Paul Sian, a real-estate agent and lawyer with HER Realtors in Cincinnati. A study from the Consumer Financial Protection Bureau (CFPB) concludes that many consumers don’t shop for mortgages, and they tend to get their mortgage information from lenders and real-estate agents, who aren’t impartial.

According to Sian, borrowers tend to fixate on the home’s purchase price, followed by the interest rate. But factors like closing costs, the loan’s total price, whether the loan is fixed or variable and whether the borrower is required to get private mortgage insurance can dramatically alter what borrowers end up paying.

Here are four common mortgage errors and tips for avoiding them.

Shopping just one lender

Whether it’s a new car or the latest gadget, consumers know it pays to shop around for the best deal. But half of mortgage borrowers consider just one lender or broker in their shopping process, according to the CFPB study.

“It is a good idea to shop around for mortgages in order to get better rates,” Sian says. “Sometimes large banks and lenders don’t offer the best rates that can be had. Additionally, some lenders add in fees. While the final fees do show up at the end, many borrowers don’t understand the fees and accept them as the cost of getting the loan, even though they could’ve avoided those fees by shopping around.”

Failing to seek objective info

When questions about mortgages come up, borrowers typically turn to their lender, broker or real-estate agent. While those are good sources, the CFPB found that many borrowers could benefit from seeking out additional, objective sources of information, such as housing counselors and news sites.

“Borrowers should seek a range of information, but each source should be vetted thoroughly,” says Greg Cook, a senior loan officer with Platinum Home Mortgage in Temecula, Calif. “Borrowers should remember that the right answers to their questions are often determined by the specifics of their individual situation.”

While Cook understands that many borrowers, especially first-timers, ask friends and family for advice, he says those sources are often unreliable because what works for one person may not make sense for their friend. News outlets, on the other hand, can be good places to get a “30,000-foot view” on the topic, but, Cook says, they won’t shed much light on an individual borrower’s situation.

As for housing counselors, Cook says they can be a valuable resource, but often their expertise is limited to lending programs, meaning they can help borrowers discover what types of loans are available, but they won’t necessarily have insight into which lender is the right choice.

Not learning about the process

Talk to homeowners and they’ll likely tell you about how complex, confusing and time-consuming the mortgage process can be. Knowing that, it’s certainly a good idea to arm yourself with as much knowledge about borrowing as possible. But amazingly, the CFPB found that about half of borrowers “aren’t very familiar with the process” and 14 percent were “not at all familiar.”

“A good mortgage (specialist) will lay out the process for you in a very clear manner,” says Elan McMillin, a mortgage banker with USA Mortgage in St. Louis. “The borrower should receive some sort of outline that details step by step what is expected of them during the process and the details of what is required from application to close. If the lender can’t provide an outline like that immediately, then it may be time to shop for another lender.”

But the problem may not be with the lender, according to Cook, who says it’s surprising so many consumers don’t know more about the process, given the abundance of information out there.

Focusing on irrelevant factors

Given that so many borrowers look to a single lender when shopping for a mortgage, it’s not surprising the CFPB found that many borrowers often pick lenders based on geographic proximity, a pre-existing financial relationship, or other factors, like reputation, that may not be relevant to the loan’s total cost.

But the best deal isn’t necessarily the lowest rate, according to McMillin, who points out that different loan products may have the same rate but substantially different costs, which underscores the need to learn about the variety of loans available.

Mike Pence used $13k of campaign funds for mortgage, golf fees during 1990 congressional bid

Who’s crooked now?

During a failed 1990 congressional run, Indiana Gov. Mike Pence, Donald Trump’s newly announced running mate, used nearly $13,000 in campaign funds for a slew of personal purposes, including paying down his mortgage and covering golf tournament fees.

The then 31-year-old lawyer didn’t break any laws at the time — but Pence’s questionable ethics outraged voters and ultimately prompted the Federal Election Commission to crack down on politicians who abuse their campaign funds, the Washington Post reported.

“If you’re giving money to Mike Pence, you’re paying his mortgage!” Billy Linville, campaign manager for Pence’s rival, incumbent Democrat Philip R. Sharp, screamed at a 1990 press conference after news of the spending spree broke.

Pence eventually lost in a landslide — an outcome directly related to the shady spending, Linville said.

“Without question, he may well have won the election if it had not been for that,” he told the newspaper in a new interview. “It was a bombshell, for sure.”

According to 1990 campaign finance records, Pence used $12,867 from his campaign account for personal expenses. That’s the equivalent of about $23,700 in 2016.

The payouts included seven $992 mortgage payments and seven of his wife’s $222 car payments. More cash went to buy household groceries, pay off Pence’s credit cards and even cover the costs of participating in golf tournaments.

When news broke before the election, Pence stood by his spending habits. He had taken a significant pay cut when he backed away from his job as a lawyer to run for office, he claimed.

“I’m not embarrassed that I need to make a living,” he told reporters at the time.

But Sharp’s campaign harped on the issue, claiming it showed a dirty, crooked side to the young Republican — and the incumbent Democrat went on to win in a 19-point victory over the challenger.

After losing, Pence apologized for the dubious spending, calling the gaffe “an exercise in naiveté.”

The scandal also prompted FEC commissioners to reevaluate spending rules. While the agency deadlocked on whether to investigate the shady spending of Pence and other Republicans during the 1990 election cycle, it unanimous agreed to rewrite the rules for the future.

Using campaign money for personal expenses is largely prohibited now, although some exceptions exist. Candidates are still allowed to collect salaries from their campaigns.

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Mortgage rates dip as student debt tempers buyers - Bankrate.com

Like searching for Pikachu, look high and low for the best mortgage rate - The Boston Globe

Comments Print By Michelle Singletary Washington Post July 16, 2016

WASHINGTON -- There’s a major craze going on right now that’s rivaling the obsession over “Pokemon Go.”

But in this game, the goal isn’t to capture creatures. It’s to catch the best rate you can to refinance your mortgage.

With rates approaching historical lows — again — many homeowners are racing to refinance their mortgage. Last week, the Mortgage Bankers Association (MBA) reported an 11 percent jump in refinances compared with the week before. The association also reported that refinancings accounted for 64 percent of all mortgage applications, up from 61.6 percent the previous week.

As you shop for a loan, here are some tips to help you make the best decision:

Know what other borrowers are being offered. It helps to be informed. Rates change frequently. Knowing what interest rate other loan applicants are getting can help you negotiate and steer clear of a financial company that might be looking to gouge you.

Look at the weekly rate data put out by Freddie Mac and the MBA.

Each week, Freddie Mac (www.freddiemac.com) surveys lenders nationwide culling information on points and rates for 30-year and 15-year fixed-rate products as well as 5/1-hybrid adjustable-rate mortgages, or ARMs. The survey is based on conventional conforming home purchase mortgages with a loan-to-value ratio of 80 percent. Freddie Mac polls about 125 different types of lenders.

The MBA says its survey covers over 75 percent of all US retail residential mortgage applications. To find its weekly report, go to www.mba.org and look under “MBA News.” Click the link for the latest mortgage application release.

You might notice that the numbers from the MBA are higher than what Freddie Mac reports.

“As opposed to Freddie Mac, which tracks purchase rates only, MBA’s application survey tracks rates for purchase applications as well as refinance applications, and rates on refinances tend to be a bit higher,” said MBA’s chief economist, Mike Fratantoni.

Another factor that might lead to differences in average rates is discount points, which is a way borrowers lower their interest rate in exchange for an upfront fee. A point equals about 1 percent of the loan amount.

Here’s what Freddie Mac reported as of July 14:

A 30-year fixed-rate mortgage average of 3.40 percent.

A 15-year fixed rate was 2.72 percent.

A 5/1 year ARM was 2.76 percent.

Know where to shop around. Average interest rate figures give you a general idea of what others are being offered. But what matters is what rate you can get.

Of course, check with your current lender, but don’t just stop there. One site I like to consult is bankrate.com. On the homepage, look for the box on the right that says “Compare Rates.” Click on the tab for “Refinance” and you’ll see below the national a field that says “View rates in your area.” Type in your ZIP code to find offers from lenders.

Keep in mind that what you are eventually offered will depend on your personal situation, which includes your credit profile.

Know the numbers. I hate writing this as much as you probably hate hearing what may seem obvious. But time and again, I see people refinance without truly understanding their loan deal.

Someone was bragging to me that he refinanced and didn’t have to pay “anything.”

You may not have to put up money at the closing, but your loan costs something. Don’t think a “zero-cost” or “no-closing costs” loan means you didn’t pay anything. Lenders get paid.

When you get your loan estimates, study the documents carefully. That “no-cost” loan might mean you are paying a higher interest rate. Or you’ve agreed to roll the cost of the refinance into the loan, which could also mean paying more interest over the life of the loan. However you structure your loan, know the numbers, for real.

While you’re on bankrate.com, plug loan estimation information into the site’s “Mortgage Refinance Calculator.” Try a few scenarios — zero points, points, rolling the cost into the loan — to compare your refinance costs long-term.

Refinancing is about the numbers. Sure, rates are super low right now. But if you’re not looking in the right places, you won’t win at this game.

Michelle Singletary can be reached at michelle.singletary@washpost.com. Follow her on Twitter @SingletaryM.

Mortgage rates dip as student debt tempers buyers - Bankrate.com

mortgage-blog-mortgage-rates-for-friday-july-15

Mortgage rates mostly fell today. The average rate on 30-year fixed mortgages dipped, the average rate on 15-year mortgages fell and the average rate on 5/1 ARMs rose.

Rates on mortgages change daily, but overall, they have fallen to near record lows. If you're in the market to purchase or refinance, it's a great time to lock in a rate. But while the large majority of households believe it’s a good time to buy, some prospective homebuyers are reluctant due to student debt.

30-year fixed mortgages

The average 30-year fixed-rate mortgage is 3.41%, down 11 basis points from a week ago.

At the current average rate, you'll pay about $444 per month in principal and interest for every $100,000 you borrow.

You can use this mortgage calculator to estimate your monthly payments and see the effect of adding extra payments. It will also help you calculate how much interest you'll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-rate mortgage is 2.69%, down 2 basis points from a week ago.

Keep in mind that shorter-term loans like 15-years come with a trade-off: You'll pay more per month, but you'll also save thousands of dollars over the life of the loan.

For example, monthly payments on a 2.69%, 15-year loan would cost around $676 for every $100,000 borrowed.

Over a 15-year term, the total interest payments would be around $21,639. That's about $38,214 less than what you'd pay in interest with a 30-year loan at today's rate.

5/1 adjustable-rate mortgages

The average 5/1 ARM is 2.91%, up 12 basis points from a week ago.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts.

Monthly payments on a 5/1 ARM at 2.91% would cost about $417 per month for the initial 5 years. With rate caps of 2/2/5, monthly payments could balloon to $728 per $100,000 at the final adjustment.

Student debt and homebuying

A majority (80%) of surveyed homebuyers believe it's a good time to buy a home, according to a new survey from the National Association of Realtors.

And yet, there's still a large percentage of the population that's reluctant to buy due to student debt -- half of respondents in the survey under 35 with student debt. Indeed, carrying student debt is tempering their ability and appetite to get a mortgage, notes NAR.

"It's becoming very evident from this survey and our research released last month that the financial and emotional impact of repaying student debt is contributing to a delay in purchasing a home for many would-be buyers," Lawrence Yun, NAR chief economist, said in a press release.

Where rates are headed

According to Bankrate's Rate Trend Index, 18% of the panelists think mortgage rates will increase over the next week or so, 9% think rates will fall and 73% think rates will remain the same.

Follow me on Twitter: @MitchStrohm

You will see these rates listed on Bankrate site averages; these calculations are run after the close of the business day. Included there are rates and/or yields we have collected on the previous day for a specific banking product.

Mike Pence used campaign funds to pay his mortgage — and it cost him an election - Washington Post