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.
The only thing I care about is: was her press release a truthful statement? I hope this part of the story gets follow up. That part should matter to her constituents.
As for WaMu taking a "beating". Good. They made a decision to make a loan (a) on property that was $200k overvalued and (b) to a borrower with short-term employment in the Sacramento area.
She made a bad decision to purchase CA real estate in 2007 and in a location that she wouldn't live in for 5-7 years so that she could weather price fluctuations. But she made a good decision to walk away from a -$200k money sink -- if in fact she did foreclose which she claims she did not.
Posted by: BobS | May 22, 2008 at 10:32 AM
behold, the jose conseco of congress! but what's the big deal really? we've seen catholic priests molesting children, politicians with prostitutes, even a president having an affair with an intern. this is hardly worthy of such outrage.
she made a bad buy, stopped paying her bills, lost the house to foreclosure and left the bank holding the bag. her actions had consequences. sounds perfectly legal. if her constituents have a problem with it, they can take it up at the next election.
Posted by: Milla | May 22, 2008 at 10:38 AM
To Jag:
She's a democrat you blithering moron.
Posted by: doc | May 22, 2008 at 10:42 AM
I think its all fine and dandy but why notcome out with the truth already? I mean really its a matter of public record and all that she why does she hid behind false statements and all that? Crazy, the people need to know the truth and things, why hide behind the blatant lies? Now we need to know the truth and then decide with our votes and then maybe legally wise.
Posted by: physco219 | May 22, 2008 at 10:48 AM
Hey Jag, read below. Not a republican.
Could the "Rep." stand for Representative???
Checkmate!
Laura Richardson (born April 14, 1962 in Los Angeles, California) is a Democratic Representative in the United States Congress.
Posted by: BLJ | May 22, 2008 at 10:48 AM
oh my God, - lying to the media in the face of public records that clearly recorded information to the contrary.
This woman needs to be removed from public office as soon as is legally possible.
Posted by: MG | May 22, 2008 at 10:49 AM
I saw the inside of this house on the local news, and read comments from the people that sold it to her in the local paper. They lived there for about 30 years and did absolutely nothing to update it since 1960. Boy did they make out like bandits. The outside looked nice but the inside was a dump! She probably walked away because she realized she had been scammed when she paid $545k for that piece of crap.
Posted by: Linda Schwartz | May 22, 2008 at 10:53 AM
Maybe there's a countrywide connection here too (well there is, but don't know if it's significant):
According to the sacramento county recorder's website, Richardson's co-grantor was "Calif Recon Co," which is, I think, the ca branch of Recon Trust -- a subsidiary of CW Bank. Why the heck are they involved? Was the first from Wamu and the 2nd from CW? Did CW buy this debt from Wamu? What's the deal?
lastly, coincidental that Richardson's NOD was filed 12-14-07 and York's Red Rock was formed 12-26-07?
Milla, no posting during daylight hours unless you're home sick. You have mortgage payments to make!
Posted by: Duke of Moral Hazard | May 22, 2008 at 11:03 AM
While even politicians are not excempt from making bad Real Estate Investment decisions in todays market the scandal here is that she uses excuses. Her father's death while tragic does not excuse her controversial situation which only gets more pathetic based on all the contradictory statements.
She screwed up like a lot of people did and that's what the problem is, it demonstrates her weakness of character.
Posted by: Al Ramirez | May 22, 2008 at 11:16 AM
This is one stupid woman, first, in plunging to the property market when she didn't have the means, and second, to try to lie her way out of some shameful story (that she's going to be foreclosed on) and still think she's going to get away with.
I'd bet, if there's some IQ test for politicians, she would not have passed it. (Then again, most politicians would have failed it.)
Posted by: tiddle | May 22, 2008 at 11:29 AM
To JAG, a previous poster here on this blog:
Take note of the following taken DIRECTLY from Congresswoman Richardson's website.
"Representative Laura Richardson has a 99% voting record, 100% committee attendance record, is the 239th female and the 26th African-American female to serve in the U.S. Congress."
Oh, and JAG, she's a DEMOCRAT.
Posted by: Bill | May 22, 2008 at 11:30 AM
"CONGRESSWOMAN LAURA RICHARDSON
For Immediate Release
May 21, 2008
[..]
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."
You can't summarize in a better way all that will be wrong with the pending government bailout of overleveraged liars. Heck, the people who'll pass the bill are some of them...
Posted by: RAW | May 22, 2008 at 11:33 AM
I'm interested in the LATimes perhaps following up on the Duke Of Moral Hazard's posts.
I find that information rather interesting. It may have been a coincidence that they were both based in Sacramento... but in politics, there are no coincidences...
Posted by: Tombstone Realty | May 22, 2008 at 11:37 AM
....and she's making UCLA look really bad
(anyone notice that someone named "laura" made a "nobody's perfect" post?
Posted by: Uncle Billy Climbs Mont Pelerin | May 22, 2008 at 11:40 AM
For those who keep defending her, saying its not her fault, its not immoral, that I live in another planet.
I want to live in a planet where governments are manned by smart ,moral people.
ANd I can only have this if I ask for it constantly. If I let go my guard then things like this would happen. You owe it to yourself to fight for the taxes that you pay for these people. You owe it to your children to fight against idiot corrupt people like this, whatever his color is, even if the corrupt idiot is the same color as yours.
Petition to have this creature taken off her power. We have other smarter, financially responsible people willing to take the job
Posted by: Liz Wetzel | May 22, 2008 at 11:47 AM
RUBEN SAID :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?"
Ruben, you can work in any employer as long as it doesnt require character background check, like aerospace companies, or the government offices of power. Because if you dont know how to control your greed or if you are irresponsible with finances, you are easily corrupted.
You can work in shoe stores or with any job that wouldnt give you access to too much information you can sell for money.
Posted by: LivGonzales | May 22, 2008 at 11:55 AM
Maybe JAG got confused, expecting the Congressperson's political affiliation to be revealed early in the story. Except the L.A. Times reporter chose not to mention it until well into the article's 3rd paragraph.
Actually, I'm surprised it was mentioned at all--given the recent media proclivity for avoiding the D-word as long as possible during coverage of political figures' misbehavior.
Posted by: mjkbk | May 22, 2008 at 12:23 PM
I suppose that some of you believe that a politician ought to be a priest and so satisfy all your criteria for morality.yet you want to separate church and state. wake up people if she defaulted what is morally wrongwith that? How many large corporations after they have robbed us blind have not defaulted on their debt? and even some of you might be working for some of them who had their debt wiped out after filing for bankruptcy. It seems that as soon as some one a rough patch in their lives when it comes to finances you who should hope you never have one believe the worst thing about that person.Try to get a little sympathy, love and understanding in your heart and that will help you to gain the right moral compass instead of a spirit of condemnation and judgement.
Posted by: MichaelMerriman | May 22, 2008 at 12:26 PM
Somebody's lying! Please give us a follow up piece on this.
Posted by: Timotheus | May 22, 2008 at 12:33 PM
An easy fix to corrupt stupid politicians:
Replace every lawyer with a scientist. This place would fix itself practically overnight!
Posted by: Jeff | May 22, 2008 at 12:59 PM
Michael-
I don't think anyone is demanding moral perfection of our leaders here, or else we wouldn't have any. A minimal level of integrity, however, requires her to at least own up to what she has done. According to her latest press statements, she's been insisting that the house wasn't even in foreclosure! This either speaks to a total lack of honesty or complete lack of awareness of the facts. In other words, either she can't tell the truth about this or she's out of touch with reality.
At the very least, this elected leader owes us a far grater level of honesty than she has given us.
Posted by: William Jones | May 22, 2008 at 01:43 PM
So another democrat does something sleazy. So what? Ms. Richardson represents a democratic district and she'll be re-elected easily.
Why not restrict your reporting to sleaze by republicans? They can be hounded out of office relatively easily.
Posted by: Jim Bob | May 22, 2008 at 01:46 PM
Obviously, what she did is not a crime. The last time I checked, it's perfectly legal to walk away from a mortgage. But that's not the point. She lied about it. According to the evidence, the house was definitely auctioned off. She makes it sound like she still owns the house. She's either lying or demonstrating her version of Clintonian "truth" telling. Too bad the apathy level in her district is such that she won't ever have to relinquish her office. The last redistricting scheme really sucks.
Posted by: drnoe | May 22, 2008 at 01:56 PM
Why isn't Valerie McDonald running again? :( Valerie McDonald is the daughter of the Late Congresswoman Juanita Millender-McDonald. Choosing her, will keep her mother's commitment going for the 37th Congressional District for more years to come....
Joe Brown
If anyone would like to participate in a pertition, please respond to my comments at un9901@yahoo.com. Thanks!
Posted by: Joe Brown | May 22, 2008 at 01:58 PM
Technicality:
1) House is not presently in foreclosure. Someone bought it at auction.
2) House never went to bank. Someone bought it at auction.
3) if a "loan modification" == jingle mail, then she has been completely truthful.
Really, absolutely horrid. She could have been in the spotlight if she were forthcoming...
But, she is probably trying to hide other issues... oops... welcome to the bad spotlight.
Posted by: david Valentine | May 22, 2008 at 02:18 PM