The Richardson mess: She defaulted on three houses, report says

U.S. Rep. Laura Richardson was in default this spring on three separate California houses, and lost one to foreclosure, according to a hard-hitting report in today's Daily Breeze.

The Daily Breeze's Gene Maddaus: "Rep. Laura Richardson, who lost her Sacramento home in a recent foreclosure auction, has also defaulted on properties in Long Beach and San Pedro, records show."

Richardson, a Democrat from Long Beach, has declined to answer detailed questions about her finances, but has blamed her financial woes in part on the distractions caused by her whirlwind political rise, which saw her climb from local politics in Long Beach to the state Legislature in Sacramento and then to Congress in the space of two years. She also has heavy debts from her campaign for Congress in a special election last year. But with a congressional income of nearly $170,000, it is not clear why she failed to make payments on all three properties, and faced potential foreclosure on all of them.

The newspaper reports Richardson had fallen behind by $12,400 on payments on a San Pedro home in March, and was threatened with foreclosure on that property, and had fallen behind by $19,900 on payments on a Long Beach property in March, though it appears she paid that balance off.  She owed more than $570,000 on the Sacramento house when it went into foreclosure this spring.

More: Richardson "was able to bring her payments up to date on the Long Beach home relatively quickly, but the San Pedro property lingered in the foreclosure process for almost eight months, and still has a pending auction date.  In her first interview since the news broke Tuesday that her Sacramento home had been foreclosed, Richardson blamed the foreclosure on a miscommunication by her lender. She offered no apologies for failing to make payments on three separate homes and expressed no regret for failing to pay nearly $9,000 in property taxes.

More: "In her only admission of fault, she said she could have acted more quickly to correct the situation. 'I should have moved forward in an earlier fashion,' she said. 'I acknowledge that. I intend never to conduct business in that fashion again.'"

The Sacramento publication Capitol Weekly first reported this week that Richardson had lost her Sacramento home to foreclosure, owing more on the house than the original purchase price when it was auctioned off. Richardson initially denied the report, saying she had worked with her lender to renegotiate the mortgage. She now says she was unaware the house was sold at auction until this week, and believes the sale was improper.

The Breeze reports that Richardson declined to answer numerous questions about her finances, including how many payments she had made on the Sacremento house. She purchased the house in January 2007 for $535,000 and owed more than $570,000 on the property when it was foreclosed.

Richardson attempted to link her situation to the plight of others facing foreclosure, and said the experience would help make her a better advocate on foreclosure issues.  "I think this is what many Americans are unfortunately facing right now," she told the Daily Breeze. "I am concerned that I can take what I have learned from this to help somebody else. Many people are one step away from issues that are life-changing moments. When a person moves across the country, that is a life-changing moment."

Previous Richardson coverage:

May 21: A.P. reports Richardson delinquent on $8,950 in taxes

May 22: Report: Lender "took a beating" on Richardson home

May 22: Buyer of Richardson house says she "walked away"

May 23: Richardson seen as a "virtual shoo-in" for re-election

May 23: Richardson says foreclosure of her home was "improper"

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Comments

[Michael Snyder]

And this is one of the people we "trust" to regulate business & govern our society. Guess we need look no further for the source of this crisis.
Being a typical politician she first ran her scam, collected her profits, then blamed somebody else. "My foreclosure was improper". Right; try making the payments. So, you're the woman who's qualified to regulate lenders but you can't read your own loan docs, make your payments or call the bank if you have a problem.
On the face of it this woman should be in jail. What a whining lying sorry sack of fleeces! But I'll bet she's going to "introduce legislation" to be sure nobody else "experiences her pain". This five star con artist is exactly what's wrong with our government. Throw her out of office and into a jail cell where she belongs!

[Tim K.]

If this doesn't help explain why Congress keeps doing the nutty stuff it does I don't know WHAT will.

The sad part is that I'm willing to bet that a large number of the folks in our elected government are involved in some way with flipping properties, and they have a big disincentive to bring any reasonable accountability to the process.

[Jim]

It is amazing the people we elect to Congress these days. This woman can't manage her own financial house, yet will be voting on key legislation effecting all of us.

What a piece of work.

Get her out!

[Kathy]

Peter, when is this going to show up in the paper as a legitimate news story? The Daily Breeze is makes the Times look rather inept.

[CD]

Good work Peter, now we got one, lets find the others like her, who pretend to be so high and mighty that laws do not apply anymore. Go to jail, no free pass. Shall we start writing to our reps demanding an explanation. Can someone write a model letter for us to mail, so we can rally again....

[Snacker]

"Richardson attempted to link her situation to the plight of others facing foreclosure, and said the experience would help make her a better advocate on foreclosure issues. "I think this is what many Americans are unfortunately facing right now," she told the Daily Breeze. "I am concerned that I can take what I have learned from this to help somebody else."

Okay, if she represents the experience many Americans are having right now, then we truly have NO BUSINESS bailing out these people.

HeLLO?? You bought THREE houses! You have a salary of $170,000! If you were in real financial difficulty shouldn't you have stopped with just ONE????

Richardson was obviously a speculator trying flip these houses for profit and got burned by the sudden shift in the housing market.

If she tries to help pass some foreclosure bill to help those 'poor' souls who are risk of losing their home, er, make that HOMES, then this country has seriously lost its sense of financial responsibility and stability. We deserve to have our economy go in the toilet for all of the poor leadership and lack of foresight in government.

[sjen]

I heard the Richardson debacle on NPR this morning. How come LA Times has not had it on the front page?? Is LA Times too pro-Democrat to report any mis-deed done by any Democrat?

[Westside Bubble]

Be sure to read Tanta's comments today on Richardson's original Sacramento purchase decision at Calculated Risk http://calculatedrisk.blogspot.com/2008/05/
congressional-speculator.html .

[RLorarra]

I can't believe her. I'm a Democrat, and I'm absolutely appalled. This sort of news needs to be spread. I want someone in office that represents my, an average American's, interests, and not the wealthy who speculated on the housing market, lost, and now wants help from the government. This Representative need to be removed. I want a different person in Congress. She should resign.

[MT]

Any vacancies in the debtor's prison?

[msprompt]

The Times doesn't have this story on the front page -- instead they have a big bright yellow sticker ad: "Foreclosed Home Auction: over 1000 Homes Must Be Sold!" So much for reporting the news. Remember the days when A1 was reserved for reporting stories in the public interest?? At least the Breeze is getting it right. Gene Maddaus is a real go-getter.

And Richardson's comment -- that "this is what many Americans are unfortunately facing right now" -- is at least an insult to our collective intelligence and at worst a frightening example of the deep-seated psychosis that more and more seems to be a pre-req for Congressmembers.

I hope the MSM followsthe lead of Maddaus at the Breeze and the journos at Capitol Weekly.

Thanks for posting the story, Peter.

[Jimmy]

I am totally perplexed by the negative reaction to this story. There are creditors in our society. There are also debtors. Neither one is superior to the other. Debtors, even deadbeats, have every right to be in Congress. Indeed, we NEED some of these folks, esp. because the usually can't get the cash needed to run for office.

What is the source of the outrage here? I think it is totally misguided to criticize her.

[Susan Hilton]

If she can't manage her own finances why does she think she can manage the finances of others? When someone in public office doesn't pay their taxes, defaults on loan, etc. they should LOSE THEIR OFFICE IMMEDIATELY!!!!

[mark g]

Wow... talk about impaired judgement and the inability to manage what should be simple personal obligations... she's perfect for Congress!... reminds me of that old saying, if PROgress is good, then what good is CONgress?

[SoCalRealEstateNews]

We've been saying for months that our elected officials are behaving worse than the worst subprime borrowers, when it comes to budgeting.

Now I know why--they're one and the same!

The silver lining to the ongoing wave of foreclosures is the opportunites for buyers. I just stumbled on a couple of them this morning.

http://SoCalRealEstateNews.com

[Rob Dawg]

Just how does she expect to explain away the press release denying the facts? There's no miscommunication. She is using taxpayer dollars to attempt to cover up ongoing personal mortgage fraud. There's no way she got three houses with honest mortgage applications.

The moral hazards are too terrible to contemplate. Her unseemly gyrations are diminishing the office and liable to create a backlash.

What should have been an embarrassing revelation of finanicial ineptitude can now not end in anything less than censure and jail time. I honestly believe the consent of the governed is in danger otherwise.

Oh, and LATimes? Let's hear it for the in-depth expose consisting of 8 column inches on Page B6 direct from the AP wire. Two thumbs way up for their Democrat revival of the old reporting standards..... of Pravda.

[E]

Nothing but a nasty speculating house flipper. Her income never afforded her those homes...only gamblers loans.

[Laker]

Richardson is purely a RE speculator. She was in the process of flipping houses but obviously bought at the peak. No Bailout will save her.
Now we also learn that she got paid and invited by the NAR to their party. She said to be friends of the NAR...
I have a feeling that the NAR is running tight on budget and they failed to pay her...so now she cannot afford the houses.
ALSO, what kind of financial dificyulties does she have that can be simialr to other citizens. From the facts thus far, she was working for the CA state getting about $113,000 for eight months, that she got a job for the US congress paying her $170,000. So she got a raise, she did not lose any job...what do we need to help her???
She also evaded taxes from California, and therefore California paid her $20,000 for leaving early the state to server in US congress....nice.
She has to pay all taxes with interest and penalty before she can resume her congress duties. It does not make sense that official US government employee evades taxes!!! WTF?

[someday the ants will eat grasshoppers]

You can't make up stuff this crazy.

This is what "many Americans are unfortunately facing?" So she is a victim? Maybe we should send her donations, or start a Richardson relief fund? That poor poor woman.

I think it's dangerous to have someone who knows so little about economics (not to mention honesty) to represent us.

This seems like the typical mistake of a rookie 6 figure earner. Sorry, Linda, $170K does not move you out of the middle class anymore in this coutnry. Not even close. Stick to one home and a Camry like the rest of us.

I don't know whether to laugh or cry...

[Michael Snyder]

Jimmy,
What part of irresponsible, scamming, no-load, over-leveraged, liar are you too dense to understand? Is Rep. Richardson related to you or do you just think that because she's black, or a woman that she's either incapable of making responsible, honest decisions, or is it just that she must be a "victim" of circumstances? Just think of all of those nasty Realtors who took advantage of poor little Laura.
Rep. Richardson has shown sufficient acumen to get elected to office. That means she should be able to do simple math & read loan documents. She can sure call folks to ask for money, she should be able to communicate with her lenders. The vitriol directed to Rep. Richardson has been earned by her own actions. She is a poster child for all that's wrong with our government. She belongs in a jail cell but instead fools like you will work to re-elect her. When you're looking at your pay-stub, just think of how she's going to spend your money. Then you can tell me who the "victim" is.

[Jack]

While Richardson's behavior is appalling, let's not forget lenders willingly gave her 100 percent loans. For every stupid borrower, there is a stupid lender. Washington sat on its collective hands and did nothing while 100 percent junk mortgages were securitized. Lenders are as much to blame for this mess as borrowers as are the regulators who looked the other way and ignored all the warning signs.

[Michael Snyder]

Earth to Jack:
Just who is watchin' over who's watchin' over you? Did you ever draw by connecting the dots as a child? Perhaps you might try the same thing here. Do you REALLY think Rep. Richardson is the ONLY elected/appointed official up to their eyeballs in the same situation? Why do you think the bubble was allowed to inflate in the first place? Our "politically correct" method of vetting our "leaders" sucks. The Fourth Estate may have shown a profit on the Gary Hart story, but they removed our most talented leaders from the "pool" by doing it. Now we have these "politically correct" persons in Congress & the State Government screwing the entire country. Give me a randy s.o.b. who can run a business & pays their bills. Ben Franklin was vital to the foundation of our country. The Fourth Estate would never have been known as such if this generation of "journalist" had had a shot at him.

[sean]

It is people like her that brought on this mess. She had no business buying a home in the first place. This type of "home buying" artifically inflated prices.

Try living within your means next time lady.

[SoCalRealEstateNews]

Jack & Michael S.
You're both right: Stupid lenders and stupid borowers both contributed to the problem. But you forgot that many of them were also dishonest and/or unethical.

Then we've got stupid & unethical real estate and loan agents, stupid and incompetent regulators, a Federal Reserve that pushed the pedal to the medal after 9/11 & left it down way too long, and politicians who leaned on the lending industry hard to make more people homeowners.

For a not too brief summary, check out "How we got into this mess:"

http://socalrealestatenews.com/blog/
how-we-got-into-this-mess/

[E]

Why do we never hear from Puckhead, ShockG and SVFrealestate on these types of threads?

Things that make you go hmmmmmmmmmmmm.