Real Estate Darwinism

The Wall Street Journal reports:  The Sacramento home of Rep. Laura Richardson was sold in a public auction two weeks ago for $388,000. The Southern California Democrat bought the house for $535,000 with no money down in January 2007 and owed nearly $575,000 to Washington Mutual when the mortgage was sold earlier this month at a significant loss to Red Rock Mortgage Inc.

Rep. Richardson, a former Long Beach city council member, bought the home after winning a seat in California's state assembly. She maintains her primary residence, a four-bedroom home, in her Long Beach district. Months later, Rep. Richardson ran in a hard-fought election for the congressional seat, which was vacated when the late Rep. Juanita Millender-McDonald died from cancer. To fund that campaign, Rep. Richardson lent herself more than $75,000 and stopped making payments on the Sacramento home around the same time. 

While Richardson maintains that the home, located at 3622 W. Curtis Drive, has not transferred ownership, the home was purchased by Sacramento Real Estate Broker James York at auction for $388,000.  Broker York also assumed responsibility for Richardson's unpaid property taxes to the tune of $8,950.79.  The home is a 3 bedroom, 1.5 bath; 1,639 square feet on a 4,792 square foot lot in an upscale neighborhood.  Sharon Helmar, the previous owner of the home, said the neighbors were "appalled" that Richardson was not maintaining the lawn.  One neighbor said the grass was about a foot high until recently. 

Washington Mutual took a $200,000 beating on this home which included $18,000 in missed payments.   Richardson owed about $575,000 on the home at the time of foreclosure.

Richardson declined to be interviewed Wednesday about the foreclosure, which was first revealed in Capitol Weekly, a Sacramento-based publication. But in a statement, Richardson denied that the home was in foreclosure and said it had 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," Richardson said in the statement. "I fully intend to fulfill all financial obligations on the property."

One of Richardson's first votes upon arriving in Congress last fall was on the Mortgage Forgiveness Debt Relief Act of 2007. The bill helped homeowners by preventing the federal government from charging income tax on debt forgiven in a foreclosure, such as the $200,000 forgiven in Richardson's foreclosure.

Joining 385 of her colleagues, Richardson voted aye.

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.

Reference:

http://blogs.wsj.com/developments/2008/05/22/congresswomans-home-sold-in-foreclosure-auction/?mod=googlenews_wsj

http://209.157.64.200/focus/f-news/2020088/posts

http://www.capitolweekly.net/article.php?_adctlid=v%7Cjq2q43wvsl855o%7Cx4qkjhxlldwn8k&issueId=x48gnuowgqsg6o&xid=x4ptlrmv0w0r6x

http://www.freerepublic.com/focus/f-news/2020088/posts

http://latimesblogs.latimes.com/laland/2008/05/buyer-of-rep-la.html

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