Report: Lender 'took a beating' on Rep. Laura Richardson's foreclosure
The Daily Breeze reports that Rep. Laura Richardson (pictured) made only a few payments on the Sacramento house she bought in 2007, failed to pay property taxes, defaulted on the mortgage, and lost the house to foreclosure. The Daily Breeze reports that Richardson's lender, Washington Mutual, took a loss of nearly $200,000 when it sold the house at a public auction on May 7.
"They took a beating," James York, the Sacramento real estate broker who said he bought Richardson's house at a foreclosure auction, told the Daily Breeze.
The Daily Breeze report is based on public documents the newspaper published on its website, and an interview with York. It is at odds with Richardson's statement yesterday, in which the Long Beach Democrat said she had worked out a loan modification with her lender, and would "fulfill all financial obligations" on the property.
The Daily Breeze: "Rep. Laura Richardson lost her Sacramento home in a foreclosure auction two weeks ago, and left behind nearly $9,000 in unpaid property taxes. Richardson, D-Long Beach, appears to have made only a few payments on the house, which she bought in January 2007 for $535,000."
The newspaper's report -- that the house was foreclosed and an auction took place -- appears to conflict with Richardson's statement that the house "is not in foreclosure." (see the entire statement at the bottom of this post). Richardson's office has not responded to a request from L.A. Land for additional information about her mortgage and loan modification. The Daily Breeze reports she declined to be interviewed about the controversy.
The newspaper's report also calls into question Richardson's statement that she had worked out a loan modification with her lender and would fulfill all financial obligations related to the property. The Daily Breeze reports that the house sold for only $388,000, far below the $574,000 that Richardson owed on the property. Further, the Daily Breeze reports that the new owner, York, "assumed responsibility for Richardson's unpaid property tax bill of $8,950.79."
"Tell Laura I'd be happy to have her pay my property tax," he told the newspaper.
Photo Credit: L.A. Times
Click below to read Richardson's statement issued Wednesday.
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.
wait a minute, isnt character background check includes financial responsibilty, drug use, etc.
So how come this woman works in the government as a councilwoman. This woman should be taken out of public service, the government owes us leaders that are morally upright in every ways.
Petition for this woman to be taken out of office!!
Posted by: Liz | May 22, 2008 at 08:05 AM
This is just another example of how politicians are the example of corruptness and dishonesty.
The saying that absolute power corrupts absolutely applies to all politicians.
There is not one that is honest. Integrity is not known to them.
Impeach this woman, remove her from office, and then arrest her for mortgage fraud.
Posted by: Do right | May 22, 2008 at 09:03 AM
As I believe all politicians are corrupt, no democrat-vs-republican spittle will come through my lips.
However, I'd STILL like to know if she's gone and bought a second property in Washington, and then left the property in Sacramento to fall into foreclosure.
I really, really, really, really want to know.
Really.
Oh so really.
Cuz that smells like fraud.
Posted by: Tombstone Realty | May 22, 2008 at 09:14 AM
Whenin trouble denial and lying go hand in hand. She has proven one thing to me --she's good at both
Posted by: Big T | May 22, 2008 at 09:21 AM
Oh no! This must be a first. The first time a politician has lied.This will be difficult for me to deal with.
Well if WA MU took a bath on this foreclosure, the losses throughout the banking industry are over whelming.
Too bad we, taxpayers, are bailing out these greedy bankers. We should let them drown for creating this mess and they still live high on the hog.
Oh, I forgot, they give you free checking.
Posted by: bob lauer | May 22, 2008 at 09:23 AM
yah, yah, and someone on another blog asked, did she receive the "2nd home stipend 'cause you live far away" loophole, and then use the money for something else? The inference is that congress might have given her extra money for the house and she didn't use making her payments. The union nitwits that supported her must be PISSED!
Posted by: The Duke of Moral Hazard | May 22, 2008 at 09:32 AM
This should be a reminder to every citizen that politicians are people too. They experience and struggle with the same things, AND make the same decisions as people do. If people were trully moral in all ways, all the time, then they would be 'perfect' which is also a false expectation of anyone to have even in government office.
Posted by: Laura | May 22, 2008 at 09:33 AM
I don't blame her. If I had a house in a collapsing market like Sacramento I wouldn't pay either. Why should we struggle to keep banks in business when it was their lending practices that created the burst-bubble meltdown of homeowner equity in the first place.
Probably a good business decision to let the house go in a tumbling market and try and pick up another in a market where house prices may be more stable or have already seen dramatic declines.
Morality is so subjective.
Posted by: Bill | May 22, 2008 at 09:35 AM
If she defaulted on a mortgage and caused the lender a loss, then she made a financial gain (by not paying the lender the contracted mortgage amount). Her lender needs to report this to the IRS so that she is taxed on the gain.
Posted by: DavidB | May 22, 2008 at 09:42 AM
Last I checked, falling behind on your mortgage is neither a sign of corruption nor moral deficiency.
If it ever happens to you for whatever reason, I sure hope your employer doesn't use it as an excuse to fire you -- "Hey, if you can't take care of your own finances how can I rely on you to be able to properly manage your work responsibilities?"
Posted by: Ruben | May 22, 2008 at 09:43 AM
If these allegations are true (not sure who to believe, a real estate broker or a polititcian), this woman is unfit to serve and should resign. I hope to see more about her on the front page of the Times.
No wonder we are where we are.
Posted by: someday the ants will eat grasshoppers | May 22, 2008 at 09:48 AM
We are responsible for electing our officials. The LA Times is responsible for reporting the news. So what are we going to do? We have another lying member of congress.....Weren't we promised a higher ethical standard by Nancy Pelosi. On top of that we have the LA Times who have shunted a top political story to the Real Estate section. Its no wonder things get worse with every election.
Posted by: Erik | May 22, 2008 at 09:48 AM
Oh, and you can send Laura an email at:
http://richardson.house.gov/IMA/issue_subscribe.htm
I encourage you to paste your posts to her and not just to this blog--I'm pretty sure she's not looking at the LA times right now. She needs to know how the LA Land readership feels about jingle mail, tax fraud, and deceit.
Posted by: someday the ants will eat grasshoppers | May 22, 2008 at 09:52 AM
Get this fraud out of office
Posted by: jerry martin | May 22, 2008 at 09:56 AM
Why am I not surprised? Of course, is just another corrupted REPUBLICAN!
Posted by: jag | May 22, 2008 at 09:57 AM
Idiot banks deserve what they get - they should have asked for 20% down in such a high risk market (do they even bother with assessing their risk?? Jeesh, I want to be a banker cause I suck at math too)
Posted by: jb | May 22, 2008 at 10:01 AM
Because you people do not vote, do not care, and allow yourselves to be totally BS-ed by campaign mailers and hot button rhetoric, you get what you deserve. If you're too dumb to vote or too cynical to care or too ignorant to know how the basic functions of government work, you dont' deserve a vote and deserve jerks in higher office.
Posted by: get_real | May 22, 2008 at 10:02 AM
RE: Liz - "the government owes us leaders that are morally upright in every ways."
What planet do you live on?
The essence of government is the legal use of force to achieve goals. The government has a monopoly on legalized theft!
If they can steal from the people (via taxation, subsidies, tariffs, emminent domain, regulations) without any recourse from the citizenry, what makes you think they will act morally?
Posted by: JT Lancer | May 22, 2008 at 10:10 AM
Another low-life liberal !!!! When are the people of California going to learn? She can't be trusted with her own personal finances, or to use her own paycheck in a responsible manor, yet Californian's seem to think she should have a say on how to spend the hard earned tax dollors of hundreds of million Americans! Throw this low life in jail!!! I don't feel bad for the lender either, how could they loan her over a half a million dollors with out a down payment or even steady employment? Maybe they where trying to buy her influance on legistlative matters?
Posted by: Kevin | May 22, 2008 at 10:11 AM
Waitadoggone second. First:
"The AP also reports that, according to public records, Richardson's house was in fact sold at a public auction: "The county records show the property was sold to a company called Red Rock Mortgage Inc. of Sacramento for $388,000, although no listing could be found for the company."
Then this:
"They took a beating," said James York, the Sacramento real estate broker who said he bought Richardson's house at a foreclosure auction, told the Press-Telegram."
Please clarify. Who/what bought the house at the foreclosure auction? The "unlisted" Red Rock Mortgage, Inc. or James York?
There was a Red Rock Mortgage Inc. website, "redrockmortgage.com" that was up yesterday, but no longer. Then there's a "redrockmtg.com."
Its google description says: "Red Rock Mortgage, Inc - Mortgages tailored to your needs, your ...Professional Mortgage Planners serving Colorado and California. A mortgage is more than a tool to finance real estate. Use your mortgage to achieve"
There's a Red Rock Mortgage listed in Las Vegas:
"Nevada
810 S DURANGO DRIVE SUITE 105
LAS VEGAS, NV 89145
Tel: (702) 320-9595"
Finally there's www.redemortgage.com, which is the site for "Red Rock Mortgage Inc," with an address in Utah,that says they do loans in Utah and Colorado. Hmm...
So any of these related to York?
Posted by: The Duke of Moral Hazard | May 22, 2008 at 10:12 AM
It is delicious irony that the best argument against the looming "bailout" of buyers will be personified by the spending habits of one of the elected officials destined to vote on it.
Given enough publicity in the MSM, this lady could single handedly torpedo any "rescue" scenario currently on the horizon.
I still think, no matter what she has done, that she will be reelected. Even the fact that she is lying about having been foreclosed upon will not hurt her chances for reelection.
Posted by: orcadrvr | May 22, 2008 at 10:15 AM
I'm still waiting for someone to find $90,000 stashed in her freezer.
Oh, wait. That's Louisiana, not Long Beach.
http://www.cnn.com/2006/POLITICS/05/21/
jefferson.search/index.html
Posted by: waitingitout | May 22, 2008 at 10:18 AM
Nobody in their right mind would intentionally allow a foreclosure to kill their credit rating.
However, if that is the case she is too stupid to remain a politician. We already have a Bush in the whitehouse and that's enough stupidity for the country to share.
Posted by: Sparky | May 22, 2008 at 10:23 AM
Follow up:
Red Rock Mortgage, Inc. *is* listed with the secretary of state and York is indeed associated with that corporation. One wonders if he's a net branch for one of those other red rocks? The other weird thing is that he formed that company in 12/07. Know any other mortgage companies that were formed in the last 6 months??? Can't be many (unless they're the kind that were formed to buy distressed notes and homes at foreclosure auctions).
And btw... york is based in sacramento... our capital... and great place to wheel and deal... anyone look to see if he's getting any other great deals like that one? "Quite a beating, indeed." Maybe he's one of the reasons most people don't find deals at these auctions.
Posted by: The Duke of Moral Hazard | May 22, 2008 at 10:24 AM
Politicians are no better than the rest of the population. Thus, we get the government we deserve.
This woman is yet another one of those didn't rely on good sense and got in over her head, succumbing to the siren calls of the herd at the housing market peak. She probably had no other choice but to walk away. I would rather she did that than pay with my tax dollars to keep her in that house.
Perhaps a few of those siren calls came from the lender, who should have known better.
Please, no bailouts!
Posted by: Susan | May 22, 2008 at 10:32 AM