Thursday, May 22, 2008

Sweetheart Deals for Legislators

According to the Los Angeles Times, Congresswoman Laura Richardson may have received a sweetheart deal on a Sacramento house- a house she appears not to have paid for. The Times reports that,
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.

However, once Richardson received the sweetheart deal (how many of us would be able to not only buy a house with no money down but receive extra money from the seller towards closing costs?), she may have managed to avoid paying any money on the house in the two years since she bought it. And during that time, the house is reported to have slipped into a state of decay. The Times also says that,
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.

So, let's recap. A Democrat from Long Beach managed to negotiate a special deal where she not only had to put no money down, but the seller also gave her cash to pay at least part of the closing fees. Once the house was safely bought, the congresswoman proceeded to pay no further money and allowed the house to become an eyesore, to the point where her neighbors complained about the state of the residence. Hmmm- seems to me that if a Republican were to do something like this, it would be front-page news in every major organ of the mainstream media. But since it is a Democrat, the MSM has been mostly silent on this. I am actually pleasantly surprised that the LA Times published anything about it, though they did lead the story with Richardson's denial of the story, as opposed to reporting it straight.

Whether or not Richardson really is in foreclosure or not, it is past time to put an end to the sweetheart deals that so many elected representatives seem to manage. If they cannot afford to buy things, then they shouldn't be allowed to- elected representatives or not. And when one of them is caught in such a sweetheart deal, they should be roundly condemned, regardless of party. I am certain that there are many other elected officials of both parties who have engaged in this kind of practice. It needs to end- soon.

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