Foreclosure crisis gets personal for Rep. Laura Richardson

By May 23, 2008Foreclosure

Peter Viles over at the LA Time’s LA Land Blog brought U.S. Representative’s Laura Richardson’s foreclosure to my attention and wondered if I could shed some light on the contradiction between the reporting that her 2nd home in Sacramento had been foreclosed on (which we confirmed), and her office’s statement denying the foreclosure.

Lets dissect the statement one claim at a time:

1. “the residential property in Sacramento California is not in foreclosure…”

Having been sold at auction on May 7, 2007 with the Trustees Deed transfering the property recorded on May 19, 2007 as document number 487, the property is no longer “in” foreclosure, it has instead been foreclosed “on”.

2. “and has NOT been seized by the bank”

It also has not been and will not be “seized by the bank” as it was also sold at the auction to a 3rd party investor – Jim York’s Red Rock Mortgage. As such seizing the property was his responsibilty not the banks.

3. “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.”

Had she only not said “this property” she’d be in good shape here too. Turns out her home in Long Beach was also recently in foreclosure with a Notice of Default filed by Title Trust Deed Service Company with the LA County Recorders office on March 31, 2008 as document number 546450 on behalf of Litton Loan Servicing. According to that document she was $19,921.74 behind on that mortgage as of March 28, 2008. Checking on the trustee sale number for this default it appears that this foreclosure action has in fact been cancelled – quite possibly due to a loan modification as claimed. Perhaps she simply got confused regarding which of her two foreclosures she was talking about.

I know nothing about Rep. Richardson except that she certainly isn’t alone in facing foreclosure difficulties. I hope that rather than running from this she stands up and talks honestly about her personal foreclsoure crisis rather than simply trying to walk away.

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  • Anonymous says:

    She is an ardent Clinton supporter. Their financial managment skills go hand in hand.

  • Anonymous says:

    Clinton?  Bush?  Obama?  McCain?  Who gives a crap who she supports.  All I know is this country is an economic mess and we continue to shell out $22 billion a month on this “skirmish” in Iraq.

     

    I’ll vote for Pee Wee Herman before I’ll vote for another lying Republican….

  • Sean says:

    UPDATE – Despite being the first to spot that her Long Beach home was also recently in foreclosure, it never occured to us to look for more. The Daily Breeze now reports she has a third property in San Pedro, CA which we have in our system as scheduled for foreclosure auction 7/14/2008. It was originally scheduled for auction 5/14/2008 – but was postponed due to Mutual Agreement – which indicates she and her lender mutually agreed to postpone the sale. At least this home, which she has owned since 1994, has a 30yr fixed mortgage though it was only taken out May 2, 2005. Both the Long Beach and Sacrmento properties had 2/28 ARMs which given the terms appear to be subprime.

  • MichaelY says:

    She is gonna be in for a nasty surprise . . .

    You can’t just walk away from a refi like you can from a First Mortgage.  Thats secured debt, and if follows you after you leave, unless you declare bankruptcy.  At least thats the way I understand it.  Any experts?

     

  • Sean says:

    Mi Micheal,

    That can be true in some states, but not in California. She is actually cleared twice. First the loan on the Sacremento house that she allegedly walked away from was actually a purchase money loan, not a refinance. Deficiency judgements may not be sought for purchase money loans in California. Second the lender used the non-judicial foreclosure process, as is almost always done in California. This expedites the foreclosure for the lender, but precludes them for coming after her for a deficiency judgement.

    None of the above would preclude them for going after her for fraud, however. There is already some speculation on another blog  that perhaps she did not have sufficient income to qualify for that loan given her other obligations without comitting fraud on the loan application.

  • ECG says:

    But the second (if she had one) could still go after her for deficiency judgment as long it wasn’t purchase money…

  • Sean says:

    Right ECG, but no 2nd on this one.

  • PDQ says:

    She’s an opportunistic deadbeat and a flake who can’t manage her money. Had her constituents known this about her they would have elected the better and more skilled candidate when Laura ran to replace Juanita Millender MacDonald. As it was, it became a decision based solely on race which Laura played very well.

    I have no doubt her ex-husband and her primary congressional opponent are loving every minute of this scrutiny of her finances. Her backers who insisted that the seat had to remain with a black candidate (even as the district trended Latin) are probably sneaking towards the exits with their Sunday church hats pulled down over their faces in shame – as they should.

  • thebaglady says:

    Hey there, I like your blog a lot. I’m wondering what your thoughts are on the bank taking away the Sacramento property from the buyer? Has this ever happened to you before? Do you think the congresswoman used her political clout to make this happen?

  • Sean says:

    I had heard that, but hadn’t had a chance to confirm. Yes, I have had it happen a couple of times. Typically in these cases I ask the bank for proof of the error. If there was a legitimate error then there isn’t a lot the buyer can do… though you can ask the bank to offset your expenses, lost interest on the money, etc. Afterall it was their fault (or the trustee they hired) and there is no reason you should be out of pocket as the buyer. But keep your request reasonable, and be thankful if it is approved.

    If they fail to provide any evidence of an error that would result in the sale being overturned eventually anyway, then I’m less inclined to accept the news. Instead hire an attorney, put a lis pendens on the house and see everyone in court. Sometimes just letting the trustee know your considering that is enough that they either offer a better settlement, or they decide not to rescind. Be careful not to threaten – good trustees have seen everything and they’re better at this then you are. But again, if your reasonable, and make a good argument you stand a good chance of avoiding court.

    Either way the bank or trustee potentially has liability so it is not my experience that they rescind these very lightly. Either the bank made a legitimate error on her sale, or they decided it was worth the risk.

    Note that Jose Canseco’s foreclosure appears to have been rescinded repeatedly. Easier in that case as no one bid.

  • A round of applause for your blog. Great.

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