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Member of Congress Meets Foreclosure

Written By Brian Hicks

Posted May 22, 2008





Here’s another argument for term limits. The home of a California Congresswoman has been apparently foreclosed on.

The “victim” has been identified as California Rep. Laura Richardson.

Details are sketchy and Richardson denies it, but the scenario is as commonplace as all of the other hard luck housing stories in her home state.

Richardson bought with no money down in 2007 and quickly went upside down. Then she decided to walk away.

Here are the details from Capitol Weekly by Anthony York entitled: Foreclosure tale shows that nobody is immune from crisis

“As the real estate market softened in 2007, the new owner of a three-bedroom, 1,600-square-foot house in Sacramento’s Curtis Park neighborhood ran into trouble. The house that was purchased for $535,000 in January had lost equity. The owner fell behind in her payments, and eventually, the bank seized the home.

What makes this story different from the thousands like it is that the owner of this house was a member of Congress.

The story of the foreclosure of Long Beach Democrat Laura Richardson’s Sacramento home is a tale of a real estate market gone sour. It is also an illustration of how far many candidates will go to seek elected office, even if it means quite literally mortgaging their own financial future.

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.

Richardson declined to comment for this story.

But tax records at the Sacramento County assessor’s office show that 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.

Like many homes that have gone through foreclosure, Richardson’s new residence quickly became an eyesore. With Richardson gone, upkeep on the home lapsed, and neighbors began to get angry.

“The neighbors are extremely unhappy with her,” said Sharon Helmar, who sold the home to Richardson. “She didn’t mow the lawn or take out the garbage while she was there. We lived there for a long time, 30 years, and we had to hide our heads whenever we came back to the neighborhood.”

According to documents at the Sacramento County Clerk’s office , Richardson first received a default notice in late 2007. By December 2007, less than a year after Richardson purchased the house, she was behind in her payments by more than $18,000.

Three months later, on March 19, a notice was filed with the county that Richardson’s property would be sold at auction. According to the documents, the unpaid balance and other charges Richardson owed the bank was $587,384.

On the biggest pieces of legislation having to do with government bailouts for people whose homes have entered foreclosure, Richardson has recused herself. She did not vote on legislation by Rep. Barney Frank, D-Mass, which would direct $2.7 billion in government funds to help an estimated 500,000 homeowners who are at risk of foreclosure.

Richardson also did not vote on a measure by Rep. Maxine Waters, D-Los Angeles, that would give local governments $15 billion to purchase, rehab and resell foreclosed properties.

You just can’t make this stuff up.