Wednesday, May 21, 2008

Congresswoman Loses House to Foreclosure

From the Capitol Weekly (via Mish):

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 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.

The Curtis Park house is not Richardson's primary residence. She also owns a four-bedroom house in Long Beach, in her Congressional district. Real estate records show she purchased that house in 1999 for $135,000. An estimate from puts the current value of that house at $474,000.

"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."
The article does note that she recused herself from the housing bailout vote. FWIW, here's the listing details:

3622 Curtis Dr
Sacramento, CA 95818
Asking Price: $569,000
Bedrooms:2    Baths: 1    Sq. feet:1774
Last Listing Date: 2006-12-09

Listing History:
Down 18.6% from $699,000 On 2006-04-09
Down 16.2% from $679,000 On 2006-04-21
Down 12.3% from $649,000 On 2006-05-12
Down 8.1% from $619,000 On 2006-07-08
Down 5.0% from $599,000 On 2006-07-28

True days on market: 244
# of Times Listed: 4

Previous Sales:
Sold on 2007-01-10 for $535,500

MLS# 60074017      Google Maps
Assessed Value       Property Tax Bill

And here's the Notice of Trustee's Sale:


El Goyo said...

And the sale was conducted April 07, specified bid at 388K (nearly 200K less than was owed) property was purchased by third party.

Anonymous said...

A 2br/1ba Curtis Park house went for 388? Yikes, that's still way too high. Someone trying to catch a knife, I'll bet. Houses in my neighborhood (a 1910 suburb) have been selling, too, and I wonder who's daft enough to pay the prices asked. At least some small justification can be made for these old inner suburb areas (Land Park, Curtis Park, Elmhurst, East Sac, etc.) having some premium, being how they're much closer to the Downtown business center, but even so it is still Sacramento, and should be coming down more. When Natomas and Laguna/Elk Grove are absolute bloodbaths, and the other areas regain sanity, then I'll be feeling more comfortable.