Anthony York published an excellent article yesterday illustrating the extent to which our current housing crisis has impacted people. This cautionary tale is a must read as Anthony has focused on one specific home buyer who also happens to be a California Member of Congress.
Long Beach Democrat Laura Richardson was elected to the California Assembly in 2006. She promptly purchased a 1,600 SqFt home in Sacramento for $535,000 in January 2007. In April, Rep. Juanita McDonald died creating a Congressional opening in Richardson's district. Naturally you can't float a lure like that in front of a politician without expecting a hefty bite and that's just what Richardson did. Running against fellow Democratic hack Jennie Oropeza, Richardson loaned herself over $60,000 dollars for the campaign, which she ultimately ended up winning.
Sometime during the campaign or shortly after winning, Richardson made the decision to let the Sacramento house slip into foreclosure and she stopped making payments on the home. Neighbors complained the place quickly became an eyesore as she never mowed the lawn or took the trash out even while she was there, let alone after she decided to dump it back to the bank.
Records show that she eventually walked away from over $600,000 in unpaid mortgage loans and fees. Interestingly, records also indicate that even though she purchased the home in January 2007, well after the start of the housing decline in that area, she was able to purchase the home with 100% financing. What makes that even more interesting is that it clearly was her second home, which should not have qualified for 100% financing anyway.
As evidence that she is in fact an accomplished politician, Richardson has wasted no time paying herself back for the money she personally invested in the campaign. Of the nearly $587,000 she claims to have spent on the campaign, which just ended in March, she has already paid herself back more than $18,000 of the money she loaned herself. Nice! Meanwhile her lender is on the hook for $600k in Sacramento. Somebody should forward the article to DC area lenders since she'll probasbly be hitting them up for a hefty new mortgage soon.
Now she's back there representing US on legislation pertaining to the foreclosure problem, Fannie & Freddie issues and the housing crisis. Well, at least on matters of mortgage fraud and walking away from your commitments, she can bring some first hand knowledge to the debate - or can she? On the biggest single piece of legislation dealing with government bail-outs for people whose homes have been foreclosed, she had to recuse herself. She did not vote on the bill from Rep. Barney Frank granting $2.7 billion to homeowners and she was also not able to vote on the bill by Rep. Maxine Waters granting local governments $15 billion to purchase, rehab and resell foreclosed properties.
Sometimes I am just so damn proud to be a Californian.
Remember, Don't wait to buy real estate - Buy real estate and wait.
Yep we live in one helluva state. I am surprised that she is not being investigated for mortgage fraud?
Yep we live in one helluva state. I am surprised that she is not being investigated for mortgage fraud?
Gene - sometimes I miss living in California, but then I read about stuff like this. Well, I guess we all have politicians like her, in some way or another.
We have sent a few of ours to prison in the last few years. Sounds like California could use a few prison cells for some of their's.
Naw Randy - our Governator just announced an early release program to save the state money - so we'll actually have more candidates availabkle to run next time.