Foreclosure

Los Angeles Times reported 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.

That is what they all should do with the sub prime loans

The house "... is not in foreclosure and has NOT been seized by the bank," Richardson, a Democrat from Long Beach, said in a statement.

She did not say it never was seized, or was not about to be siezed.

"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.

A mortgage company allowing a no money down loan is stupid.

"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.

Apparently being a black Democratic congresswoman she felt the government would take care of the problem for her.

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."

It sounds like she went a long time without even making payments on her no money down loan. Gee, no money down, and don't even have to make payments.

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.

WLS blogged prior to being elected to Congress, Richardson was a newly elected member of the California Assembly, having won her seat in Nov. 2006 representing Long Beach. This meant she had to spend a signficant amount of time in Sacramento tending to the business of the legislature. Most state legislators in California maintain their residences in their home districts, and rent/share apartments or homes in Sacramento which they pay for with a per diem housing allowance provided to them in their office budgets. They can spend this allowance on hotel rooms or apartments. Did I mention that the housing allowance is tax free for members who live more than 50 miles from Sacramento? So why did Richardson, two months after being elected, buy a $500,000+ house in Sacramento instead?.... Why did she stop paying her mortgage on the Sacramento house? According to Capitol Weekly:

Richardson declared her candidacy for the seat, and soon found herself locked in a hotly contested, and very expensive race for Congress against state Sen. Jenny Oropeza, D-Long Beach. While her campaign heated up, Richardson’s house slipped into default. Richardson fell behind on her mortgage payments as she loaned her Congressional campaign $60,000 – money that has begun to be paid back to Richardson personally from her campaign account, according to records from the Center for Responsive Politics.

Rather than continue paying on the loan as the house lost value in the declining housing market of Sacramento, she loaned personal funds to her campaign, and simply walked away from the mortgage. She still has a four bedroom house in Long Beach.