Update: Congresswoman denies foreclosure report

Update: California Rep. Laura Richardson today denied a published report that her $535,000 Sacramento home had slipped into foreclosure, saying she had renegotiated her loan to keep the home.

The house "... is not in foreclosure and has NOT been seized by the bank," Richardson, a Democrat from Long Beach, said in a statement. "I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement -- with no special provisions." (Richardson's entire statement is at the bottom of this article).

Earlier, Capitol Weekly reported that Richardson walked away from the mortgage on her $535,000 Sacramento home, letting the house slip into foreclosure and disrepair less than two years after she bought it with no money down.

"While being elevated to Congress in a 2007 special election, Richardson apparently stopped making payments on her new Sacramento home, and eventually walked away from it, leaving nearly $600,000 in unpaid loans and fees," the publication reported.

Richardson declined to comment for the Capitol Weekly story. Her office issued a written statement Wednesday afternoon.

Capitol Weekly, citing tax records at the Sacramento County assessor's office, reports "... in January 2007, Richardson took out a mortgage for the entire sale price of the house -- $535,000. The mortgage amount was equal to the sale price of the home, meaning she was able to buy the house without a down payment, even though the housing market was beginning to turn. A March 19, 2008 notice of trustee's sale indicates that the unpaid balance of Richardson's loan, which is held by Washington Mutual, is more than $578,000 –- $40,000 more than the original mortgage."

In addition to 100% financing on the home itself, the report quotes the woman who sold the house to Richardson as saying she also gave Richardson $15,000 toward closing costs.

The weekly reports that Richardson's residence quickly became an eyesore, angering neighbors. The report says she recused herself on two key House votes on government efforts to address the foreclosure crisis.

Richardson's statement, however, said she did not recuse herself from those votes, and was instead absent from the House.

Click below to read the entire Richardson statement.

CONGRESSWOMAN LAURA RICHARDSON

For Immediate Release
May 21, 2008

The story published in the Capitol Weekly regarding residential property that I own in Sacramento requires clarification.

Within a 12-month period last year (2007-2008), I was a member of Long Beach City Council, the District Director for California Lt. Gov. Cruz Bustamante, a member of the California State Legislature, and, now a member of Congress. While the transitioning has impacted me personally, the residential property in Sacramento California is not in foreclosure and has NOT been seized by the bank.

I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement -- with no special provisions. I fully intend to fulfill all financial obligations of this property.

On two housing bills that were cited by the Capitol Weekly, the allegation is that I recused myself from these votes. I did not. I was absent from Washington, D.C., and my duties in the House of Representatives due to the untimely death of my father and his subsequent funeral in California.

I understand that these homeownership issues are a reflection of what many Americans are going through as they fight to keep their homes and to remain financially stable.

Comments

[Susan I]

Boy, I bet we won't be hearing about his one in the MSM news. First, she is a democrat, second, she is a congresswoman, third, she is black, and fourth, because it would reiterate the fact that some people are losing their homes because they just stop paying, and that it their fault! Not the governments!!!

I am so sick of hearing about the "mortgage crisis" when most are people that just want a bail out, and others are the ones who got caught up in the "flip this house" craze. These people thought they could flip their house and make some quick money. Why should the government bail them out?!?!?!

[Westsider]

It is absolutely disgusting that this "representative" has shafted the banks and contributed to the blight of a neighborhood. Hopefully her political adversaries are taking note.

[Tax Payers, pay the bill]

She is learning quick. When you are in Congress, you don't pay for anything.

[Cal]

We are going to find out that GWB pulled all the equity out of the White House with a subprime refi from Countrywide and will be walkig away in January. Just wait, it's coming.

[RonB]

And to think that a week or so ago, there was a report stating that it is urban lore that people are walking away from their home loans.

[Margaret]

Just the kind of personal responsibility and fiscal prudence we need in Sacramento!

[Freddy]

What a scammer. Politicians are all criminals at heart especially Democrats.

[JLF]

No one wishes such a problem on anyone else and the lady has my sympathy - to a point. But the question remains as how her consituants can trust their representtive to use good judgement and common sense in representing them if she makes such a bad call in her private life. Just because you have a high income (relatively speaking) as a congresswoman does not mean you don't have to manage you rmoney and make good choices. Do you suppose she wishes she was still renting?

[john]

she should be newly un elected

[Windfall]

Your fine, upstanding citizen legislator used this transaction to steal $15,000 from the seller.

But it's O.K.

She's not a Republican.

[Chris]

I feel I speak for all totally ignorant people when I say I am shocked that a congressperson could do something unethical!

[Tombstone Realty]

Well on the one hand, it was kind of her to recuse herself from housing related votes.

But I guess the next question is did she buy another property (unless she's in an apartment now), before letting the one in Sacramento foreclose?

Could this be grounds for some kind of fraud case?

[Joe]

She's a deadbeat she should be removed from her seat in congress...a typical Democrat...thinks it's beneath her to pay her bills...stick it to some other poor shlub...

[Corruption]

A corrupt demoncat? Nooooo, I don't believe you for a second. Ooops, back to reality now, sorry I was yawning. A corrupt idiot democrat trying to get into some heavy graft before she was established in Washington. Unfortunately, all of the people that voted for her probably encourage this behavior (look at any other indicted dems and continued support by the electorate).

[Donald]

Why am I not surprised that she is a democrat?

[Ron]

Wow, there's some fiscal responsibility for you. She obviously is a democrat.

[Danno]

Gee, most people wait till they get to congress before becoming worthless.

[F. Meglin]

Don't surprise me none, most dems in congress are corrupt as... their destiny.

[Timmy J]

Typical Democrat. Do as I say, not as I do. But somehow - no doubt - it is all GWB's fault.

[Typical]

Hmmmm.... no mention of her party affiliation. It must mean she's a democrat. They never forget to put the "R" in front of a republican when they screw up.

[SRW]

The gov't is the cause for this housing mess, when they forced lenders to accept people with out any credit. The wolves are guarding the hen house and in this case one of them is taking a 600000 ride. She should be kicked out.

[Dave Xeriatis]

She is a typical political hack. and does not deserve to have a seat in Congress. We have enough problems without having deadbeats as as our lawmakers. Whatta travesty!

[rck]

Why blame her? A $535,000 house with NO DOWN PAYMENT, and then no payments for two years... what a deal! As soon as Obama gets elected he and the Democratic controlled Congress will enact legislation to see to it that us working stiffs will bail her, and those like her, out. Free homes for all of those on the dole, or in Congress. New social programs for the oppressed in this nation. A windfall tax on the oil companies, and who do you suppose will pay for that tax???? Could it be those of us buying gas to get to work??? I have heard that Pelosi and company is seeking a windfall tax on OUR retirement program profits, that will help EQUALIZE incomes and improve the standard of living for illegal immigrants and other less fortunate minorities?

OH YES... CHANGE IS COMING! POCKET CHANGE FOR THOSE THAT WORK AND PAY THE BILLS! THE TIME FOR ANOTHER TEA PARTY IS UPON US!!

[David Reynolds]

How did she come to owe 40,000 dollars more than the original loan? Either way, sounds like she made the right move. Always a plus when we got a representative with good economic since.

[Wil NC USA]

This is why our country is going to turn into a cesspool. THESE are our elected leaders behaving this way?

I am sure some dimwhit nutball will try to "excuse" her behavior or blame it on someone else. SHe is a crook. PERIOD.