Boomer’s Blog

Amid more gory details emerging about California Congresswoman Laura Richardson’s habitual failure to pay her debts, Washington Mutual (WaMu) filed a notice of rescission on her Sacramento home that was sold to real estate investor James York at a foreclosure auction.

Broker Takes a Bath
York, who owns Calif.-based Red Rock Mortgage,recently acquired Richardson’s Sacramento home at a foreclosure auction for $388,000. At that time, the lawmaker had failed to make payments on that property for almost a year and owed $9,000 in unpaid property taxes. She paid $535,000 for the home, which she bought in Jan. 2007, shortly after being elected to the California General Assembly. Soon after, she sank into default on her other homes in Long Beach and San Pedro, Calif.

While Richardson has been filing statements denying the foreclosure and a lengthy history of default and unpaid debts, York, also a broker, has been busy cleaning and repairing her house for sale. He told the Daily Breeze that he plans to file a lawsuit against Richardson and WaMu this week, because he believes that the lawmaker has received preferential treatment from her lender, and that he is the rightful owner of the home.

Richardson, a Long Beach Democrat, has said throughout her foreclosure scandal that her Sacramento home should never have gone to foreclosure auction and claims that she had worked out a loan modification agreement and had begun making payments to WaMu. The Daily Breeze also reports that the lender has declined to comment on the details surrounding Richardson’s case because she has not waived her rights to privacy.

In Richardson’s case, it appears that WaMu already has lost nearly $200,000 on the Sacramento home deal. If the foreclosure were overturned, the lender may have an opportunity to recoup some of that loss - but only if Richardson can manage paying for her three homes and an apartment rental in Washington, D.C., on her $169,300 annual congressional wages. This week, the Sacramento Bee revealed more details surrounding Richardson’s eight-year history of failing to pay her debts.

Richardson Defaults on Mother’s Home
Since 2000, the homes Richardson still owns in San Pedro (where her mother lives) and Long Beach have gone into default six times. The amounts she’s owed on these properties has ranged from $5,742 to almost $20,000, according to documents on file with Los Angeles County.

Lawmaker Racks Up Defaults, Votes
In the past few months however, the defaults have hit the lawmaker with rapid fire: Five defaults in that time period have racked up nearly $71,000 in debt, the LA Times reports. During the same period, Richardson lent nearly $200,000 to her political campaigns, which propelled her meteoric rise from Long Beach City Councilwoman, to California Legislator, and finally to the U.S. Congress.

More Unpaid Debts, Abuses Reported
Richardson also has been under scrutiny for failing to pay her utility bills, for car repairs, and for abusing her vehicle privileges beyond her reign as a city councilwoman. The Press-Telegram reports that the lawmaker promised to pay a mechanic $735 in 2005 for repairing her BMW and never followed through. Later that year she wrecked that car and abandoned it with another mechanic.

Rather than paying for the repairs, the Press-Telegram reports that Richardson checked out a Toyota Prius from the city for official “City Council business.” Thirty thousand miles later — and after she left the City Council, Richardson returned the Prius.

In the year that Richardson used the city’s Prius, she drove it 30,920 miles, city officials report. That amounts to an average greater than 80 miles daily, or about 2,400 miles per month, for Richardson’s part-time council job in a 50-square-mile city, the Sacramento Bee reports. City policy prohibits the personal use of vehicles from its fleet. City records also show that only other two council members who used city vehicles during the same period averaged 900 miles per month and less than 400 miles per month, respectively.

In 2001 and 2002, Richardson reportedly had the highest vehicle expenses of any council member, in part by putting nearly 7,000 personal miles on her car in 2002. At the time, Richardson told reporters that she was unaware of rule prohibiting personal use of a city vehicle.

While Richardson failed to returned the Press-Telegram’s calls for comment on these issues, she did manage to finally pay her debts with the auto shops and sweep the electorate. Last week, Richardson won her Democratic primary for reelection by a whopping 75 percent of the vote.

Doess anyone else out there find this story to be totally outrageous?

California foreclosures and the mortgage meltdown have been making international news headlines for some time. But this month, news  from the Golden State went from bad, to the Twilight Zone.

Much like the classic TV show, first made popular in the 1950s due in large part to host Rod Serling’s melodramatic gravitas, California’s housing market begs for a prelude to prepare readers for the truly bizarre. As Serling said: “There is a fifth dimension beyond that which is known to man,” He might as well been introducing late-breaking developments in California’s foreclosure crisis.

Here are the five most most startling, weird and ugly foreclosure stories to come out of California so far this month.

1. California REO Foreclosures Selling like Ipods
   This month, the LA Times reported that in April, California home auctions sold nearly 23,000 foreclosure properties at courthouses throughout the state. That’s is a 44 percent jump from the number of REO auctions reported for the state in March. That’s 1,000 homes sold at auction each business day for an entire month.
2. IRS Tax Delinquency, Lies and the Lawmaker
   Although she denied it earlier this week in a written statement, public records show that California Congresswoman Laura Richardson’s Sacramento house was sold via foreclosure auction on May 7. When she bought the 1,600 square-foot home in 2007, she paid more than $535,000. By the time it sold at auction, she owed $600,000 in unpaid loans and fees, including nearly $9,000 in property taxes, reports Capitol Weekly.
3. Countrywide Exec’s Email Debacle
   When an e-mail sent by a distressed homeowner inadvertently landed in his in box, Countrywide Financial Chairman Angelo Mozilo mistook the “reply” button for the “forward” button and sent his caustic response directly to the sender. The LA Times reports that not only was he unsympathetic in his response, he characterized the online foreclosure counseling service that encouraged the homeowner to contact his lender as “unbelievable” and “disgusting.” Mozilo has been under fire for cashing out while Countrywide, and the rest of the mortgage industry was tanking. In 2006, Mozilo was paid nearly $50 million in compensation; between 2006 and 2007, he cashed in stock options then valued at $140 million.
4. Never Neverland Again?
   Mid-month, entertainer Michael Jackson averted the scheduled foreclosure sale of his 2,700 acre Encino Neverland Ranch when his $23.5 million loan was purchased by real estate investment giant Colony Capital, according to Reuters.com.
5. REO Lender Takes the Bat to Canseco’s Portfolio
   At the beginning of this month, news got out that baseball great Jose Canseco let his 7,300 square-foot Encino home slide into foreclosure. He bought it in 2005 for $2.8 million, and when foreclosure struck, the property already had an IRS lien from a judgement levied against Canseco for starting a fight that leveled a Miami night club several years ago. This week, the Chicago Tribune reported that Canseco, who blames his two divorces for his financial woes, intends to generate wealth in his new career as a celebrity boxer.