Richardson mum in the face of mounting pressure

Embattled Rep. Laura Richardson (D-Calif.) remained mum on Friday following more news about her personal housing crisis and a warning from House Speaker Nancy Pelosi (D-Calif.) to put her fiscal house back in order.

Richardson, who has dodged repeated calls for information regarding her multiple defaults on three home mortgages and her financial disclosure reports, failed to report a heavily indebted mortgage on her initial 2007 financial statement.

{mosads}Official financial reports for House members will be released on Monday, and it remains to be seen if Richardson’s official report will have been amended from the one she previously filed.

However, Pelosi issued a warning to Richardson on Thursday that she risks whatever repercussions may come from failing to disclose her assets and liabilities to the letter of the law.

“Every member of Congress is responsible for living up to the highest ethical standard, to having the fullest disclosure of his or her assets, as is required by law,” Pelosi said at her weekly news conference. “And many people in our country are caught in a foreclosure crisis. Members of Congress maybe are as well.”

After falling too far behind on mortgage payments on a home she purchased in Sacramento in January 2007, Richardson was forced to watch the home sold at auction last month.

In the aftermath, it was revealed that Richardson has defaulted on mortgages for three California homes since 1999.

According to records pulled from Los Angeles and Sacramento counties, Richardson has defaulted five separate times on her primary residence in Long Beach, a home she purchased in 1999 and refinanced in the summer of 2006 for a new $446,250 mortgage.

The prior summer, Richardson took out a loan from Wells Fargo, in the amount of $359,000, to purchase a second home in San Pedro.

After defaulting twice — in September 2007 and again in January — and owing $367,436 on an original loan of $359,000, Richardson received notice from her lender in April that her San Pedro home was going to be sold at auction. According to reports, that auction is scheduled for July 14.

But it is Richardson’s Sacramento home that has garnered the most attention, and places her in the most immediate risk as a member of Congress who is bound by federal law to disclose certain assets and liabilities.

According to Richardson’s 2007 financial disclosure statement — which she filed in February — she failed to report her Sacramento home mortgage as a liability even though she owed $40,000 more than she paid for the home, which was purchased in January of that year.

By the end of 2007 — which marks the end of the 2007 financial disclosure reporting period — Richardson had accumulated $575,000 in total debt after failing to make payments on her original $535,000 mortgage, according to Sacramento County records.

Financial disclosure laws require members of Congress to report home mortgages as liabilities if indebtedness exceeds the purchase prices of the item, and congressional ethics and finance experts have said that, on a plain reading of the law, Richardson was required to disclose such an indebted mortgage as a liability.

Under the section of the report for liabilities, Richardson simply lists, “N/A.”

A senior House Democrat close to leadership on Thursday afternoon said he had spoken to Richardson about the matter and she had assured him that, with regard to her Sacramento home, the “bank screwed up.”

On Wednesday the Los Angeles Times reported that James York, the real estate investor who bought Richardson’s Sacramento home at a May 7 auction for $388,000, is now claiming that Richardson’s lender, Washington Mutual, reclaimed the property on behalf of Richardson.
York had recorded the deed on May 19 and had begun renovations, the Times reported.

"They took the property back, and they didn't even send back the money," York was quoted in the Times. "It's clear what's happening is Ms. Richardson is abusing her political power and using it for her own political needs.”