A Democrat congresswoman bails on her half-million-dollar-plus, second-home mortgage; Update: Dem denies report; “I fully intend to fulfill all financial obligations of this property;” Update: She’s a Hillary superdelegate
Scroll down for updates…
Well, hell, why not?
As I noted earlier this month, Jose Canseco did it.
And as I told you back in January , more and more Californians were doing it.
So now comes word, through Capitol Weekly via L.A. Land, that California Democrat congresswoman Laura 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.”
The story of the foreclosure of Long Beach Democrat Laura Richardson’s Sacramento home is a tale of a real estate market gone sour. It is also an illustration of how far many candidates will go to seek elected office, even if it means quite literally mortgaging their own financial future.
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.
Richardson’s decision to let the house slip into foreclosure was set in motion by an unlikely chain of events, only some of which had to do with Sacramento’s crumbling real estate market. Richardson was elected to the Assembly in November 2006, and purchased her new capital home two months later. But in April 2007, Rep. Juanita Millender-McDonald succumbed to cancer, creating a Congressional vacancy in Richardson’s district.
Richardson declared her candidacy for the seat, and soon found herself locked in a hotly contested, and very expensive race for Congress against state Sen. Jenny Oropeza, D-Long Beach.
While her campaign heated up, Richardson’s house slipped into default. Richardson fell behind on her mortgage payments as she loaned her Congressional campaign $60,000 – money that has begun to be paid back to Richardson personally from her campaign account, according to records from the Center for Responsive Politics.
It’s not her primary residence. According to Capitol Weekly, “[s]he also owns a four-bedroom house in Long Beach, in her Congressional district. Real estate records show she purchased that house in 1999 for $135,000. An estimate from Zillow.com puts the current value of that house at $474,000.”
Like I said four months ago:
The stigma of default is gone. Political rhetoric absolving borrowers of their responsibilities — and encouraging them to spend, spend, spend even more — has made it possible. And so has federal legislation intended to “help.” The omnibus spending bill passed last year prevents the IRS from taxing mortgage forgiveness as income up to $1 million for a two-year period.
Finance blog Calculated Risk reported last week that increasing numbers of homeowners are walking away from their homes by choice. A Wachovia executive noted during a conference call that they are “people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they’ve lost equity, value in their properties…” Some are bailing for cheaper homes in the same neighborhoods. There’s even a term that’s become popular over the last couple of years — “Jingle Mail” — that describes when homeowners cut loose and mail in the keys to the bank. Ho, ho, ho.
The true victims in this “crisis” are those who paid for homes within their means and those who waited to enter the housing market.
Congresswoman Richardson is a welcher who embodies the ethos of Washington and the bailout culture:
Spend, borrow, screw over, repeat.
***
WLS at Patterico’s blog has some good questions:
There are a couple of interesting facts here that an enterprising reporter might run down.
First, prior to being elected to Congress, Richardson was a newly elected member of the California Assembly, having won her seat in Nov. 2006 representing Long Beach. This meant she had to spend a signficant amount of time in Sacramento tending to the business of the legislature. Most state legislators in California maintain their residences in their home districts, and rent/share apartments or homes in Sacramento which they pay for with a per diem housing allowance provided to them in their office budgets. They can spend this allowance on hotel rooms or apartments.
Did I mention that the housing allowance is tax free for members who live more than 50 miles from Sacramento?
…Considering this LAT story about State Sen. Tom McClintock using a loophole in the per diem housing allowance law to own houses in both Sacramento and the LA suburb of Thousand Oaks — and receiving $36,000 tax free in per diem in 2007 as a result — wouldn’t it be nice to know of Congresswoman Richardson was receiving tax-free per diem from the State of California to pay for the mortgage on her new home in Sacramento, which she elected not to pay in order to pump money into her campaign for Congress?
You might think a reporter from the LAT or elsewhere might think that was a story.
***
Update: Hmmmmm….
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.”
L.A. Land has her full statement, which also claims: “I fully intend to fulfill all financial obligations of this property.” In addition, Richardson denies recusing herself from voting on two mortgage crisis-related bills in the House.
Responsible homeowners and taxpayers in her district–and the rest of the country, for that matter–deserve more details. The story’s not adding up.
Update: McClatchy Watch points out that Richardson is a Democrat superdelegate pledged to Hillary Clinton.
See what others have said
Note from Michelle: This section is for comments from michellemalkin.com's community of registered readers. Please don't assume that I agree with or endorse any particular comment just because I let it stand. A reminder: Anyone who fails to comply with my terms of use may lose his or her posting privilege.
Trackbacks
- Democratic Congresswoman Walks Away From Mortgage
- Ed Driscoll.com
- snapped shot
- JammieWearingFool
- Democrat Congresswoman Defaults On $578,000 Mortgage | Stuck On Stupid
- Left wing housing · Altitude
- Dem congresswoman stops paying mortgage - Southern Maryland Community Forums
- Michelle Malkin » More on the deadbeat Dem/Hillary superdelegate/Calif. congresswoman who welched on her mortgage–and her taxes, too!
- Rhymes With Right
- Michelle Malkin » Deadbeat Dem defaulted on three home loans while lending her campaign $77,500. Hellllooo, Congress?
- UNBELIEVEABLE, at best! at Desert Conservative
- Dem defaulted on THREE home loans…while loaning her campaign $77.5k « Crush Liberalism
Comments
You must be logged in to post a comment.
Categories: Subprime crisis
Patterico
» Your Assignment: Compile Obama’s Flip-Flops
TPMmuckraker
» Election Central Saturday RoundupPower Line
» Pointing FingersBelmont Club
» IntermezzoTigerHawk
» Judgment on Iraq: Sorting right from wrongGateway Pundit
» Col. Bud Day "Swiftboats" General Wesley Clark (Video)NewsBusters.org
» McCain, Like a 'Scary...Gun In The House'?protein wisdom
» Chimpy McHitlerburton’s smirky rodeo ride through history, 25: the last slice of Saddam cake eaten by secret greedy killbotsNewsBusters.org
» WaPo Challenges SCOTUS on Anti-Death Penalty Ruling
w00t!
Way to set an example for the rest of the country, Congresswoman Richardson.
/sarc off
I’m sure Maxine Waters is ready to do the same….
You won’t hear much about this because is a black, female Democrat.
Well, if GWB hadn’t stolen the election in 2000 this wouldn’t have happened!
/sarc off
Great, simply great!! This incompetent moron goes from raising her hand (to protect and defend the USA), to lowering it, palm up, for a hand out! Despicable…but what else can you expect from a Californicated liberal? Weasel-ette!!!
Reprobate…again.
I’d like to receive monetary compensation for my bad choices, too. Where exactly do I sign up? (And a price list would be handy as well - for the right amount of cash, I would be more than happy to make some additional poor choices. . .after all, a financial bailout certainly softens the blow, and I wouldn’t have to learn anything from the experience.)
I had to check to make sure this wasn’t a Scrapleface or Iowahawk article. It appears someone got caught using their house as their personal ATM, but couldn’t take the personal responsibility to pay the piper now that the bill is due. It just goes to show how good Democrats are at running away from financial responsibility, reality, the war against Islamic fascism, etc, etc, etc …..
If someone walks away from a mortgage, and gives the house to the bank in the form of a foreclosure and disrepair, how is this supposed to be turn into a “hand out.”?
Does this woman write checks for our country????? How does she uh… SLIP INTO DEFAULT?? WTF… Well we can certainly bet on the fact that the homeowner bail out will pass now as the members of congress need a way out for themselves….
I am going to use the funds from the sale of Negative Point Offsets from the other thread to help bail her out. That should take a few billion years. That is about the same ammount of time it will take to vote her out of her seat in California.
Obama will fix this problem too. A bailout in every pot!
Debtor’s prison doesn’t seem like such a bad idea. No consequence for a crime, leaves a crime ready to be committed.
Over and Over again.
How did anyone manage to find out she had a (D) after her name?
Century 21 + Catch 22 = Chapter 11
Not only is this not helping Michelle Obamas children, but it makes you wonder how they can handle the countries economy if they can’t handle thier own pocket books?
Paging Pelosi - please explain to this woman how to make millions in Real Estate…
How could you not see this whole mess coming anyway? If you do nothing but buy and resale homes but rasie the price by 50,000 each time, eventualy it will be overpriced and someone will be stuck with the bill. DUH.
Sonofdy, I think they forget which is their money and our money. They accidently spend their money like it’s ours and soon fall into deep debt.
If you don’t have children, the best scenario might just be to hunker down in a gated community, play golf, drink at the 19th hole and say F it.
John, i recently sold my house, bought a smaller one thats right SMALLER, paid off over 50,000 in debt, refurnished my house and still have money in the bank. I did this because
1/ 3 people in a 3,000 square foot house is just a waste.
2/ I am expecting a call to take a dusty trip for about 12 months soon.
But clearly I am smarter than this congress person because I ended up with less debt and actualy a better house. (well for me)
What ever happened to mortgage contracts? All of them that I know of enable the lender (or the guarantor, if it’s insured) to sue the defaulter for repayment. I know from experience that VA used to.
ADDI 2003, made loan qualification, ie downpayment and credit checks, discrimination. Government causes the problem, government fixes the problem and we all pay for the good intentions.
Well gee, now that you mention it, maybe it isn’t a bailout. Maybe she had all the intentions to pay for this “new” home with her congressional salary. I’ll bet NOT, though. She is on the public dole, and I’ll bet she thinks public dole “owes” her. Or,
The fine print on the mortgage documents was too small for her to read…
She believed the lender, who said she could afford it…
All the money from graft didn’t pour in like she had hoped…
She couldn’t pay for the house AND a new car, so the house had to go…
Who winds up paying for her, and others like her, mistakes? It gets paid by the taxpayers.
She still has her “high profile” job, and title, though. Maybe the majority leader will name her to the Housing Accomodation Board, becasue of this “tramatic” experience.
Do you think the lender is going to go after a member of the majority party of California…to his peril?
Hence my characterization of “hand out.”
If you are a liberal muser, wise_man, never mind…you will NEVER get it!
Beware you D.C. area mortgage lenders. There will be a new crop of California congress members moving into the area after November. Demand cash or a link to their line of credit from LaRaza.
Democrat black woman from California. No surprises here.
sounds like some fuzzy math there ROFL, but right on target!
And the bank will put the house up on the market for someone else to buy. And this idiot is out of her money. Good riddance. I just don’t see how this is supposed to be a positive, or how she is or could get an hand out from her incompetence.
What the hell is wrong with you?
Most first mortgages used for a purchase, as opposed to a refinance, are non recourse. In other words, they can only go after the house.
Even with recourse loans, it is rare for a lender to go after the deficiency.
If a bailout gets approved, it’s time we all stop paying our mortgages. If irresponsibility is to be rewarded then we must all become irresponsible.
This would bring the system to it’s knees.
Last I looked, these folks make a nice, six-figure income.
What a nice example she’s setting, huh? I hope her constituency (who was dumb enough to put a woman like this in office in the first place) isn’t going to take example.
No surprise here. Our culture of personal blame evasion has eliminated the shame of failure, and Ms. Richardson’s willing accomplices in the press (”all the news that
’s fit to printfits our agenda“) will ignore the story.The day will come that our elected representatives will have shielded us from the consequences and shame of every unwise choice and every unsafe act, and will have convinced a majority that it is government’s role to ensure equal outcomes regardless of education, ability or effort.
No matter, we can just tax the rich to pay for it.
/sarc off
A commenter from the L.A. Land article.
Thank God I don’t have to ask YOU that question, as it is readily apparent.
Remember, this is one of the people the democrats want to run YOUR Medical Care.
You might be interested in “Merton’s model of default”, which most financial institutions use to evaluate credit risk in corporate debt. In this model, a corporation has an “option to default” and will exercise that option (i.e. it will default) the moment the value of the firm is less than the outstanding debt.
If ordinary people used this model/strategy, they would default on any mortgage the moment the market price of the home slipped below the present value of the outstanding mortgage payments.
If you stigmatize ordinary people who voluntarily default on mortgages, you’re holding them to a higher standard than corporate America.
There is a class of colored people who make a business of keeping the troubles, the wrongs and the hardships of the Negro race before the public. Having learned that they are able to make a living out of their troubles, they have grown into the settled habit of advertising their wrongs - partly because they want sympathy and partly because it pays. Some of these people do not want the Negro to lose his greivances, because they do not want to lose their jobs. — Booker T. Washington (c. 1911)
I don’t understand. What are you doing this for?
I don’t understand. Doing, what?
Are you talking about Richardson’s situation, or just generalizing?
That is the biggest load of crap. Oh…never mind I just noticed who posted it.
Hello??? She’s a Democrat. Rules don’t apply to her.
Over and out.
Okay. So this congresswoman is cool with doing this because business does it? How does this help michelle Obamas children?
I remember the days when Bankruptcy was a serious sin. Nobody ever wanted to declare Bankruptcy because it was so humiliating and shameful.
Nowadays, the idea that Bankruptcy is just another clever financial strategy goes right along with flaunting one’s defaults and foreclosures, especially now that our leaders are doing it.
lgm, so all of corporate America can just walk on debt anytime they want? Are you sure you’re not referring to your friends in Venezuela?
Ok one thing I hope someone can answer. Surely this kind of think will severely effect their credit rating, and if so, they should not be able to borrow a cent elsewhere for up to 7 years (until record of the default drops off the, errr, records). In addition, their credit card rates and existing loan rates should also increase as they are clearly a higher risk. Is this happening though???
.. and yeah, how does this help Michelle Obamas children?
lgm doesn’t believe in corporations money grows on trees and government provides jobs and condoms.
This is typical of what happens with no money down mortgages.
The buyer has no vested interest in the property, when values go down, just walk away. Easy.
Interesting note, for normal people, a bad credit rating will invalidate thier secret security clearance. I wonder if this will happen to this congresswoman?
basically, this is a second house, so as she continues to pay on her first house the impact will be minimal after the 4th or 5th year if she continues to pay good on other credit items. after the 7th year it all drops off and her good credit is completely restored.
She bought her house in Long Beach for $135,000 in 1999, and it’s currently worth $470,000 now, she makes $170,000.
She’s a dead beat. And a Demcorat.
Silkyinfamous I hope you received my apology for the snitty remark I made the other night….
Isn’t being on the government payroll a type of welfare? If you think about all of the BS that these self perpetuating bureaucratic buffoons accomplish in the government et.al …they are ALL on WELFARE…supplied by our generosity. (ugh! gag me with a pitchfork.) Some of these people have NEVER held ANY type of job … in the REAL world. I’ll bet Richardson’s daddy never wore combat boots!
She isn’t in Sacramento. She could either sell the house for less than the mortgage value, and be stuck paying the difference, or let the bank take the house (i.e., foreclosure). Why shouldn’t the banks “suck it up” too? I’m not saying the congresswoman’s behavior isn’t irresponsible or a bad example, but the bank lent a lot of money based on absurdly inflated CA real estate values. Of course the bank’s gonna get burned. They lent more than the collateral’s worth. Maybe the bank and other institutions will think twice before lending on over-inflated prices driven by speculation.
sonofdy said:
Are you kidding me? Neither Bill nor Hillary (and more than half of their staffers) could not pass a security clearance! That was one of the BIG issues when he became POTUS!
Oh Lordy, I hope the mortgage holder slaps her with that nice little surprise people get when they don’t file a bankruptcy when they default. What nice little surprise? It is a 1099 at the end of the year for the amount of money on the “forgiven” debt that the lender DIDN’T get back when the house was finally sold after it was foreclosed. It is considered INCOME by the IRS. HAHA. Since there was no mention of a BK in the article and her Long Beach house has a lot of equity, I doubt if she filed a BK. Let’s just hope she gets a nasty tax bill since she screwed the lender.
$535,000, in California. You can’t buy a dog house in California for $535,000.
One more comment, how in the HELL did she qualify for a mortgage for a SECOND home when the state legislators don’t make all that much money in California? Do they get a really fat expense account to write off their 2nd home expense in lieu of a livable salary while serving in Sacramento?
What do you expect from a democrat? They are “special”. They can do whatever they want. The sad part about it, is that many people support them.
I would hope her Republican opponent uses this in the upcoming campaign. This is a ready made ad regarding medical care and budget deficits if there ever was one.
Course the constituents will re-elect her anyway. And if she does get beat, she can join up with Cynthia McKinney and go into lobbying for the poor and down trodden.
How did these type of mortgages get started? What determines the price of any goods?
She should be jailed.
How does this not violate election law? She:
1. “Loaned” herself money for her election
2. Then began to fall behind in mortgage payments
3. Defaulted on her mortgage
4. Leaving no more than a credit stain
5. Is now “repaying” herself
Check my math, doesn’t this mean she used an unsuspecting bank to fund her election - and this isn’t theft via fraud?
We wouldn’t even be in this mess if liberal democrats would pay their bills on time.
It’s only illegal if you’re a Republican.
Spend, bendborrowover,screw,repeat.Oops! Oh no I did NOT just write that.
I went to her Congressional web page, and I found out that she isn’t an American.
Nope.
It says in at least 2 places that she is an African-American.
Welcome to America Ms. Richardson, please don’t be a stranger.
I think Merton’s model was for assessing the probability of default, not saying they should default. In any event, the likelihood of increasing the value of the business in some way would have an effect on the firm’s decision - they wouldn’t automatically default. If the woman couldn’t afford the house, then she and her bank both share the blame.
California Democrat congresswoman Laura 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.” WOW! how does that happen, that’s a lot money to lend with no down…did she get it from Tony Soprano, guess not,she still alive. looks shaky tho.
What an archaic term. Thank you for bringing back the ethos of shame.
These days such a statement comes across to many as sarcasm (sigh).
To the contrary, it is genuine hope.
Here she is:
click
figures
PA, with all respect, it has nothing to do with whatever we might learn from her picture.
As for Merton’s model, this addresses the issue from a transactional aspect only. What’s missing is that fact that the terms “Contract” and “Covenant” used to have meaning for most God-fearing folks. When we give our written word to do something, in exchange for something, and then fail to keep up our end, for whatever reason, we need to work it out or be punished by the remedies available to the other party.
Doesn’t matter what happens in “business”. If I can’t be trusted to keep my word, everything else is for nothing.
Now do you really think a woman like this pays taxes?
If this story were to break in the MSM (It will not, this is theoretical as she is a Dem), then it will be spun to show her as a victim of George Bush’s evil ways. If this had been a Republican, we all know it would be a national story by now.
I call it “Theft By Deception” and I sure wish a DA in SoCal would too.. Well, I’m not holding my breath because the DA is probably a Dem too..
BTW, black, insane, female Democrats are allowed to violate election law - there is film of C. McKinney standing inside a polling place telling people they should vote for her - illegal in Georgia anyway but don’t try to call a black, insane, female Democrat on it.. You would be racist.
I’m pretty sure I related this story before but I worked with a woman in 02 that bragged that her and her loser husband declared bankruptcy and how stupid people were who didn’t and paid their bills. The scary thing was this gal taught Math.
This isn’t right, none of it is. Why do the rest of us bother to work so hard, buy within our means, do without, etc. when clowns like this don’t have to?
- lgm
Except Merton’s model is not to evaluate risk in a corporate debt. You totally misrepresent what Merton’s model is used for.
It is also known as the Asset Value Model. It is primarily used by brokers and analysts to evaluate a company’s ability to service its debts, and to evaluate the likelihood of a credit default by said company. Overall, it is a tool that allows anaylsts to better determine the value of a company.
I’m not sure where you got your version of the facts, but they differ from everything I’ve ever learned about Merton’s model.
A few people here ask how this mortgage bubble got started. It began when bankers cooked up a scheme with Wall Street con artists to package these mortgages as mortgage-backed securities (also known as collateralized debt obligations) and market them to suckers as a sound investment, even getting rating agencies such as Standard and Poor and Moody’s to falsely give these shaky investments A ratings or higher. Relieved of having to actually hold these mortgages, bankers and other lenders went crazy. There is plenty of blame to go around and not all the bailout money is aimed at impecunious borrowers.
Yes, why not ? Live by your own example you skank ! I wonder if this is a publicity stunt to show how bad it will be with Bush/McCain in the white house. Vote Obamba or lose your house ! What a load of donkey crap.
ct davis, the story is already being spun. Read it. Here goes.
{{The story of the foreclosure of Long Beach Democrat Laura Richardson’s Sacramento home is a tale of a real estate market gone sour. It is also an illustration of how far many candidates will go to seek elected office, even if it means quite literally mortgaging their own financial future.}}
Ct davis, she didn’t mortgage her financial future, she mortgaged the bank share holders financial future.
She is a Congressman-person-lady. But Democraps elect moronic libtards with zero standards.
nbarry??? So Wall St is to blame for this CONGRESSPERSON-WOMAN-LADY being a sucker and irresponsible fraud??
And inner cities, school systems, and….EVERYTHING THEY TOUCH!!!!
I’ve got dibs on the $90,000 cash in the freezer and the hoopty in the garage.
WE are all very sorry that George Bush stole your home from you, MRS. CONSECO !
This is why the people in SOCIALIST Europe don’t want to work more than 30 hrs a week-
They’ve found that WORKING doesn’t work!
How many of us would continue to work if we knew that our $$$$ would just go to those who do not work?…..
Wait a minute ….it’s already happening!
Welfare was the first step…and the gvt keeps goin and going and going…
LESSER OF TWO EVILS …ANYONE?!!!!!
lgm’s facts typically emerge from between his flaccid cheeks.
Damn, ya got that right Texas……..
His flacid cheeks that he sits on Texas Tiger.
Unless things have changed in California, when I applied to be a police officer, a thorough background check was done. It was done not only to validate my law-abiding history (vetting), but to also insure that I was not in debt over my eyeballs. The theory being, and I agree with this principle whole heartedly, the candidate for a “law enforcement” position would not be in a position where someone could “buy them,” hopefully, averting corruption within the department.
Having said that, why aren’t candidates for public office, at least held up to this standard? For that matter, why aren’t lobbyists scrutinized more closely as well?
The answer…money and power. Politicians WILL NOT bite the hand that feeds them, unless it is the powerless, apothetic masses. Once bitten…?
WOW ! I just got another E Mail from Sen. McConnell begging me for a 25 dollar contribution. Maybe hes gonna have to walk away from his house too. Poor public servants…….
California politicians are a unique breed. They love to tell us what to do, tell us why unions are good and business owners are evil, and then they do the complete opposite of everything they tell us we have to do.
Right_On can tell you what an Adam Henry is, a highly technical law enforcement term. It covers most of our California politico-weasels.
Definitely not a Patrick Henry.
C’mon lgm. One login per poster. No fair doubling up.
A-firm on that, americangrunthog!
I want to know is how Richardson walking away from her mortgage is going to help my children?
For those of you that want to put a face with the name, try this:
http://richardson.house.gov/
Check out the photos…and why does Pelosi have her hand raised? Her left hand is nowhere near the bible…strange!
nbarry:
That would be … wrong.
This entire debacle started when liberals and government began to call mortgage lenders racist. Liberals demanded that lenders create special loans for people who didn’t qualify.
Surprise. These mutts still don’t qualify. And so they’re walking away from their responsibilities.
Texas Tiger - flaccid is not something normally associated with cheeks, but LMAO anyway. Great word picture.
LA Times blog is reporting that she is disputing the reported foreclosure:
http://latimesblogs.latimes.com/laland/2008/05/report-californ.html
I think Geminicontender meant to say,
“His flacid cheeks that he sits on, Texas Tiger,” or “Texas Tiger, his flacid cheeks that he sits on.”
Thank you, Yashmak!
I always get the impression that lgm thinks we are as ignorant as his liberal friends, and that we either simply know he is creating statements out of whole cloth, or that we won’t go and look it up.
I pity his students.
As usual it is another driveby crapload.
To paraphrase Mr. Miyagi: Crap on, crap off.
What a difference a comma makes! If that’s the case, my apologies to geminicontender.
You know - I work in the loss mitigation area of a major bank - I help reconstruct loans for people everyday so they can keep their homes. Stories like this make me sick.
So much for leadership. I doubt their will be any ethics issues with this congress.
This thread brings up something I have been wondering about for sometime. That is, a breakdown of the party affiliation/voting record of those whose homes have gone into forclosure. I suspect I already know what the numbers would look like based on personal observation and discussion with some real estate friends but have not seen any studies or mention of it anywhere. Anybody?
How does one with her income and assets acquire a $500K+ mortgage…and put no money down?
What influence was expected?
Wasn’t Pelosi (most ethical EVAH!) pushing the bailout pretty hard?
Interesting - I wonder if she too was getting $36,000 tax free per diem to pay the mortgage on that house. An excellent point.
In my opinion, her handout came from using the property at no cost to herself…particularly since she decided to spend money she had on her campaign rather than on her contractual obligations.
The “handout” would come if there is a bailout to include the banks that incurred such risky debt.
It seems as if she planned to “flip” the house since she already owned one in her district. Why else would she buy another OUTSIDE her district.
Her timing was off, the market goes south, and she walks away.
Eventually, if the bank is near failure or does fail, do the taxpayers then get stuck with the tab because it’s federally insured?
I still have a hard time understanding how she could have gotten such a huge no money down mortgage on her salary and assets.
There’s got to be more to this story.
I’m sure the drive-by media will follow up on this.
/sarc off
More detail from a 10:51pm ET AwtP story here.
A couple excerpts:
and:
she says it’s not in foreclosure and has not been seized but:
Typical surrendercrat…probably has Michael Moore and Al Franken’s accountant as well:
From the neighbors description of the run down, neglected condition of the place it almost sounds like she turned it into Section 8 housing while she owned it. LOL!
The problem is that these bad loans and perhaps more importantly the securities instruments they are atttaced to are proliferating faster than Congress and sometimes the Federal REserve and Bond rating companies can keep up with…
Hence the current credit crunch/
Thus some fianacial firms and investors got stuck with securities whose underlying loans had dubious credit which is why the Federal reserve has dropped the discount rate for banks to borrow funds from the Fed from about 6% to about 2% in less than 2 months, and additionally the Fed is setting up auctions to let financial firms bid for T-bills, and “pay” for them to the Fed by giving the bad assets/loans to the Fed as “payment”.
I was always taught by my parents to be responsible and pay your bills. A person who “borrows” money and doesn’t pay it back, has no class or character. Because of that teaching, I may be old-fashioned to a lot of people, who feel it’s okay to borrow, promise and then ignore. It’s almost like legalized stealing. It takes a really low person who feels no remorse at all, from refusing to pay back a loan. In earlier days, people like this lady went to jail until they paid their debts. Nowadays, you file a paper and all is forgiven.
She should have talked with Obama first. I bet he could have set her up with Tony Rezko for a sweetheart deal on that house.
Yashmak said (#73):
First you say it isn’t for corporate debt, then you say it is, then (naturally) you call me an idiot.
FOX reported on this, this morning and they said the house was sold at auction earlier this week.
“Auction” would likely indicate “bank auction” after foreclosure or “turning it back” to the bank.
Funny how she is denying it all. Pelosi’s got plenty of millions, she can probably bail her out to make it all go away.
Do like I did - write your congresscritters. Last year when a story about how good the “detainees” at Gitmo were being treated I wrote to my congress woman and two worthless sentators asking how could I get into Gitmo, because they had it better than I did, being retired and all.
I got a survey back from my congress woman, a form letter from one senator and nothing from the other one.
You might have better luck than I did.
Military members would lose their security clearance due to financial instability (more specifically, the security risk associated with a lack of financial responsibility) if their home slipped into foreclosure. Does anyone know if the the same rule applies to members of Congress? Without a security clearance, could she continue to represent her district?
lgm, you need to put your thinking cap on.
Just because the model is related to debt doesn’t mean that it determines when a company should deliberately default.
The other commenters provided perfectly accurate information. YOU did not.
corkie,
The Merton model assumes that a company defaults when it’s total worth to the owners becomes negative. It doesn’t tell anyone to do this. People throughout the finance industry use this model to put a price on the risk that a company will default on bond payments. The Merton model also is a component of models that estimate loss distributions for CMOs (mortgage debt) and assume a similar behavior from individual mortgage holders.
Nice try, lgm. You clearly implied that the Merton model was a “strategy.”
But, if you are now willing to admit that it’s not a strategy, then why were you deliberately misleading with your first post?
Your logic was; i) the Merton model does X for corporations, ii) if ordinary people use the model, then they would default, iii) we are holding ordinary people to a higher standard than corporations.
So, I assume that you are willing to retract your statement that ordinary people “would default” if they were to use this model.
Disgustingly misleading, lgm.
- lgm
A try at deflection lgm? That’s so. . .YOU, you know?
I said it’s a tool for ANALYZING debt of other companies, which it is, whereas you claimed it’s used by companies to decide when to default on a debt, which it isn’t.
And in another complete misrepresentation, you say I called you an idiot, which I didn’t. It’s entirely possible I was thinking it, but I didn’t type it.