Update: Congresswoman denies foreclosure report

By | May 23, 2008

Update Congresswoman denies foreclosure report

Update: California Rep. Laura Richardson today denied a published report that her $535,000 Sacramento home had slipped into foreclosure, saying she had renegotiated her loan to keep the home.

The house “… is not in foreclosure and has NOT been seized by the bank,” Richardson, a Democrat from Long Beach, said in a statement. “I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement — with no special provisions.” (Richardson’s entire statement is at the bottom of this article).

Earlier, Capitol Weekly reported that Richardson walked away from the mortgage on her $535,000 Sacramento home, letting the house slip into foreclosure and disrepair less than two years after she bought it with no money down.

“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 publication reported.

Richardson declined to comment for the Capitol Weekly story. Her office issued a written statement Wednesday afternoon.

Capitol Weekly, citing tax records at the Sacramento County assessor’s office, reports “… in January 2007, 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.”

In addition to 100% financing on the home itself, the report quotes the woman who sold the house to Richardson as saying she also gave Richardson $15,000 toward closing costs.

The weekly reports that Richardson’s residence quickly became an eyesore, angering neighbors. The report says she recused herself on two key House votes on government efforts to address the foreclosure crisis.

Richardson’s statement, however, said she did not recuse herself from those votes, and was instead absent from the House. – lat

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