After falling behind on her mortgage two years ago, Rep. Laura Richardson went through a very public struggle to rescue her house from foreclosure. But after persuading her bank to give her a loan modification, Richardson seemed to have righted her financial ship.
Sadly, there are few happy endings in the current housing market, and Richardson's story doesn't have one either. Seems that after making the payments for a year or so, Richardson defaulted again, falling behind $42,000. And now she's doing what she should have done in the first place: selling her house at a loss.
True to form, she's not taking any responsibility for this. In an interview with Capitol Weekly, her spokesman said the default notice was the result of a "clerical error." Bullshit.
Now, granted, the banks have been up to some crazy things. But the bottom line is this. If your choice is between believing Richardson and believing a piece of paper filed in a recorder's office, go with the piece of paper.
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At long last, Richardson is selling the house. It has an asking price of $399,000. That's a lot less than the outstanding balance, so once again Richardson's bank -- formerly Washington Mutual, now Chase -- will end up taking a beating.
Richardson bought the house for $535,000 in 2007, then fell behind on the payments. In 2008, it sold at auction to real estate investor James York for $388,000. Richardson then fought to overturn the foreclosure sale, arguing that she had a promise from the bank that it would not be sold. The bank obliged, rescinding the sale, and York sued. The bank ultimately paid York $100,000 to go away.
As a media firestorm erupted around the Richardson case, a senior VP at Washington Mutual predicted that Richardson would default again. "I really am looking forward to her almost immediately defaulting on any new plans or failing to pay to get caught up," predicted Alan Elias, a senior VP at the bank. It took longer than he expected, but he was right.
So, does anybody wants to help Laura Richardson and JP Morgan Chase by buying her house for something close to $399K? Here's the listing.