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.

The loan documents state whether you will occupy the premises. If you don't, that's real estate fraud.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

Nobody forced WaMu to make 100% CLTV loans. The fact that this Congresscritter did not choose to pay was the risk WaMu took. If they sold the loan, the invesor was aware of the CLTV, FICO and other loan characteristics.

I'm sure this is what Pelosi meant by "culture of corruption".

Statement from the Congresscritter:

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.

I am a mortgage banker and deal with these situations daily. I would not have wanted to be WaMu negotiating with this 'Rat.

financial chicanary of the last some many years, bankers, central bankers, borrowers - certainly, though not all borrowing is strictly voluntary in an inflationary economy - brokers, the real estate "industry," homebuilders homeowners and flippers thinking $100 per square foot real estate (based on land, material and cost of labor)

There never was a real estate "industry" but I heard that numerous times in the pre-crash era
Also heard that real estate is the engine of the US economy

A real industry makes things while the real estate "industry" has been a vast paper shuffle for years. Yes this "industry" built houses, houses were built but now many are empty and abandoned

BTW My father owned a real sheet metal factory, real industry in the real world. I worked there in the summers

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