Wednesday, June 11, 2008

Update on Congresswoman Laura Richardson

Calculated Risk has an update on Congresswoman Laura Richardson, whom I mentioned in an earlier blog post.

The Daily Breeze writes:

The real estate broker who bought Rep. Laura Richardson's house at a foreclosure sale last month is accusing her of receiving preferential treatment because her lender has issued a notice to rescind the sale.

James York, owner of Red Rock Mortgage, said he would file a lawsuit against Richardson and her lender, Washington Mutual, by the end of the week, and has every intention of keeping the house.

"I'm just amazed they've done this," York said. "They never would have done this for anybody else."

York bought the Sacramento home at a foreclosure auction on May 7 for $388,000. Richardson had not been making payments on the property for nearly a year, and had also gone into default on her two other houses in Long Beach and San Pedro.

Richardson, D-Long Beach, has said that the auction should never have been held, because she had worked out a loan modification agreement with her lender beforehand and had begun making payments.

Richardson left nearly $9,000 in unpaid property taxes on the home, which she bought in January 2007 for $535,000, shortly after being elected to the Assembly....

Washington Mutual filed a notice of rescission of the foreclosure sale on June 2. That puts the bank squarely at odds with York, who has already put money into cleaning up the house and preparing it for resale.

"They owe me the property," York said. "The sale was a good sale."

York said an ordinary person would be unlikely to get the kind of consideration that Richardson has received from her bank.

"They wouldn't even get a phone call back," he said. "They would laugh at somebody who would call and say, `We had some kind of agreement.' They wouldn't give you 10 cents' worth of time."

Leo Nordine, a Hermosa Beach real estate broker who specializes in foreclosed homes, agreed that the rescission was out of the ordinary.

"It's extremely unusual," he said. "Unless (the borrower) filed bankruptcy beforehand, they'd never do it."


  1. What I'd be interested in knowing is how the bank can rescind. I mean, if there was a provision in the sale for rescinding (e.g., "bank shall have 90 days to rescind), then the fact that the Realtor thinks the Congresswoman is getting "preferential treatment" is irrelevant. But if there isn't such a provision, then wouldn't the bank's actions be illegal? ... I have to doubt that a bank would have rescinded if that action wasn't legal ...

  2. lance said...
    "What I'd be interested in knowing is how the bank can rescind."

    That I don't know.