Entitlements, Anyone?

I first published this on 5/21, but wanted to bump it to the top because of new updates:

Anybody catch this in the Capitol Weekly?

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.

Update: Response

CONGRESSWOMAN LAURA RICHARDSON

May 21, 2008

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."

Oops! Update from the LA Times: "She now says she was unaware the house was sold at auction until this week, and believes the sale was improper".

Another Update from Tanta at Calculated Risk. There's a LOT more to the story, if you can stomach it:

"Gene Maddaus of the Daily Breeze kindly forwarded today's additions to the saga. There are not two, but three homes owned by Richardson in foreclosure. And yes, she appears to have cashed out her primary residence back in 2006 to fund her campaign for State Assembly. So it looks like a pattern".

Quoting Richardson from the Daily Breeze:

"Richardson said she would advise anyone in her circumstance "to seek assistance immediately" and to maintain contact with their lenders.

She said she ultimately hopes to testify about her situation in front of the Senate, and will write to the president to urge him to sign a package of foreclosure legislation.

"We need to put a better process in place, so a person's home is not being sold up underneath them," she said. "We have to improve the way we respond to this crisis."

More from the Daily Breeze:

“One of Richardson’s first votes upon arriving in Congress last fall was on the Mortgage Forgiveness Debt Relief Act of 2007. The bill helped homeowners by preventing the federal government from charging income tax on debt forgiven in a foreclosure, such as the $200,000 forgiven in Richardson’s foreclosure.”

“Joining 385 of her colleagues, Richardson voted aye.”

Quoting Tanta:

"But what are we going to get? We're going to get Richardson all fired up in Congress about tinkering with foreclosure notice timing, which is last I knew a question of state, not federal, law, and which has as far as I can see squat to do with why this loan failed".
. . .
"I feel obligated to tell Richardson that she sounds like a real estate speculator who bought a home she obviously couldn't afford, defaulted on it, and now wants WaMu to basically subsidize her Congressional campaign by lowering her mortgage payment or forgiving debt. And that's . . . disgusting."