Things that Make You Go….Hmmm

While many American’s get strung along by Servicers in the so-called “Loan Modification” Farce, talking to different reps each time they call, faxing the same documents in for the umpteenth time… it seems that at least one homeowner was able to get modifications to multiple loans on multiple properties in what many would call “light speed.” In one case even after the home had been sold at a Trustee sale. HOW? By an act of congress? No, seems just  being a member of Congress was enough to get it done.

Rep. Laura Richardson (D-CA) Representative Laura Richardson (D-CA) is a two-term member of Congress, representing California’s 37th congressional district.

Falling into Foreclosure in May 2008, Rep. Richardson’s Sacramento home was sold in foreclosure. She claimed that this had happened without her knowledge and contrary to an agreement with her lender. Rep. Richardson had failed to make mortgage payments on the property for nearly a year and had defaulted on other home loans as well.

Rep. Richardson also failed to include the mortgage on her Sacramento home on her personal financial disclosure statements. According to press reports, Rep. Richardson has defaulted on loans at least eight times on properties she owns in Long Beach, San Pedro and Sacramento. She also failed to pay approximately $9,000 in property taxes on the Sacramento residence. At the same time that Rep. Richardson was missing payments and failing to pay her taxes, in June and July 2007, she made three loans to her congressional campaign totaling $77,500.

On June 2, 2008, Washington Mutual Bank, Rep. Richardson’s lender, filed a notice of rescission of the foreclosure sale. By that time, James York, the man who had purchased the Sacramento home, had already invested money cleaning up the house and preparing it for resale. As a result, Mr. York filed suit against Rep. Richardson and Washington Mutual, alleging that Rep. Richardson received preferential treatment from Washington Mutual because of her position as a member of Congress. In July 2008, Mr. York dropped his suit, allowing Rep. Richardson to reclaim the home. In October 2008, Rep. Richardson shared her personal financial records with her hometown paper in order to show she was up-to-date on previously defaulted home loans. She claimed the loans for her Long Beach, Sacramento, and San Pedro homes had been modified and that her finances were in order. Rep. Richardson’s amended 2007 and 2008 personal financial disclosures failed, however, to include the mortgage loans for her properties in Long Beach, Sacramento, and San Pedro. Rep. Richardson’s housing issues have continued to plague the Sacramento neighborhood where one of her homes is located. In 2008, the Sacramento Code Enforcement Department declared her home a “public nuisance.” After visits to the home, city inspectors reported they found junk and debris in the driveway and rotting fruit in the backyard, attracting rodents.

In May 2009, after neighbors complained about the home’s overgrown yard, the city posted another violation requiring that the lawn be mowed. The lawn was mowed but issues with the upkeep of the house did not end. Neighbors e-mailed and wrote letters complaining about the state of the home to Rep. Richardson and to House Speaker Nancy Pelosi, to no avail. Eventually, neighbors began taking care of the house themselves: paying gardeners to mow the lawn, water plants, and rake leaves.

10 Responses

  1. Never discount APPRAISAL FRAUD (aka USURY)!!!


  2. Rep. Laura Richardson (D-CA) should be tried for treason due to her status as a lawmaker in one of the worst states effected by the foreclosure crisis.She should be put in Jail.

    Where is the outrage?

  3. Comment on Washington Post Article:
    Banks Asked to Ramp Up Loan Help

    **LawOfPeople wrote:
    I am a real estate attorney in Sarasota, FL. and my firm has been trying to assist people with short sales and mortgage modifications with a number of these lenders. We are finding that short sales are working, although still not perfect by any means; but, mortgage modifications are simply not available. The reason is that people who are asking for help actually need help! They don’t need the lender deferring a portion of their loan for a few months or years and upon the end of the deferment or forebearance having a lump sum due, they need real help. They need interest and principal reductions and the lenders are NOT willing to do anything useful that I can see. Paul Blucher

  4. SF_Dan

    If you have not read the following article “Loan Modification: Scamming From The Top Down” I highly recommend doing so.

    Our loan mod was chocked full of great lines like;

    “we are pleased to advise you that your request for a loan modification has been conditionally approved”

    “together with any other subsequent holder or owner of the loan, hereinafter referred to as Lender”

    “except as expressly modified by the terms by the terms and provisions of this agreement, each and every term and provision of the note, mortgage and any other documents governing, evidencing, securing or pertaining to the loan are hereby ratified and confirmed and shall remain in full force and effect”

    but the BEST one of all is the release of lender clause;

    “in consideration of our willingness to enter into this modification, borrowers agree to presently release ________, _________ & their affiliates, subsidiaries, officers, directors, employees, investors, agents, attorneys and each predecessor and successor thereto from any and all claims, demands, actions, causes of action and liabilities, whether known or unknown, arising out of or in any way connected to the Loan, the Note, or other loan document. This release is effective upon your execution of this agreement and is not conditioned upon your satisfaction of the conditions required by this agreement.”

    So while I cannot agree with you more, the better question to ask is – how can we help more people understand these trap doors? Especially when there are sooooo many in the legal field who still “do not get it” and believe that a good loan mod is the best their client will ever be able to do.

  5. RE: John Anderson


    A loan mod? who’s better off with a loan mod? where they take you out of a situation where they can’t foreclose, and put you in a proper one that they can.

    Again, thank you Mr. Garfield and all — plus John Anderson cause he GET’S IT.



  6. Disclaimer: I am not a lawyer and at no time should be considered any kind of legal authority on anything… just don’t go there.

    For more than two years now I’ve blogged about my personal experiences and research findings regarding appraisal regulation (or lack thereof) in the online commentary sections of popular news articles re: foreclosure, bailout, loan modification, etc.

    I set up accounts on SF Chronicle, Washington Post, N.Y. Times and most all Florida online news portals.

    My research at that time was based around FIRREA and how Congress put up the appearance of regulation (facade) and poked it full of loopholes which had an adverse effect that caused “cascading values”. The appraisal industry is a complete wreck because of this. In addition to lack of supply of decent affordable “workforce” housing stock and tight zoning laws, shenanigans such as MERS, and repeal of Glass-Steagel have shown us that this was by no means an accident. “We The People” (WTP) have been stuck with a HUGE bill!!!

    The E-Appraise/WAMU debacle is a great example… moreover it is rumored that key legislators in charge of appraisal reform are in the hip pocket of the Data Portal / AMC crowd.

    The back story is this; the non-profit appraisal institute sold out its own members to a for profit subsidiary that they own that creates or mimics information straight out of public record. Let me repeat – Public Record. This is in addition to other large AMC’s. Appraisal regulation is so flaccid that they (state regulators) allowed tens of thousand of “honest” appraisers to get run out of the industry because of the AMC (appraisal management company) loophole. Basically seasoned (honest) appraisers were replaced with compliant less seasoned appraisers (rookies) who work for half the fee. The AMC takes the other half. AMC’s, data portals and AVM’s (automated valuation models – or in other words artificially generated computer junk) share some of the blame in the housing crisis but they have recieved very little attention at all. Congress has supposedly tried to right their wrongs by conjuring up the IVPI and HVCC… some would argue that this just more of the same old same old and that no meaningful change will happen without first looking at these new regulations and examining carefully the workings of AMC’s and data portals and AVM’s & whether or not they caused adverse effects on housing prices, thus making it easier for banks and lenders to shop for appraisers (comp checks) that played ball to get whatever values they needed. They pee’d in their own pool… of mortagage backed securities.

    Are Members of Congress in on the action here too? Funny how we never heard much about the new changes in the selection process of real estate appraisers. Now instead of hand-picking their favorite appraisers (wink wink), lenders are supposed to stay “arms length”‘ from the appraiser. No comp checks, no partial submits, no shopping for your number, no unlocking secure digitally signed appraisal docs to change numbers… no more games. Is it for real this time or just more smoke and mirrors?

    How can we trust that our elected officials will enact meaningful legislation regarding appraisal regulation after they neutered FIRREA? Many experts in the appraisal industry suggest that if FIRREA had been left alone “as is” this crisis would not have happened. FIRREA stands for the Financial Institution Reform Recovery Enforcement Act, sounds grand doesn’t it??

    Also came across this interesting piece of information, the Board of Governors of the Federal Reserve made an amendment allowing Bank Section 20 subsidiaries to trade Mortgage Backed Securities without having to demonstrate that the underlying assets met the Boards appraisal standards. They didn’t think that doing so would
    cause systemic risk to the banking industry.

    Often times a bona fide appraisal was not even necessary. A lender could pay a waiver fee and be done with it or rely on an AVM (computer generated algorithm – trash) to project the price you needed. Works great on the way up. On the way down, not so bueno.

    Now NAR and NAMB are crying the blues because they don’t want to include foreclosure sales in comps. This totally compromises the way the industry was supposed to operate (free market). If they hadn’t blown the cap on valuation we might still have a construction industry, a real estate industry a mortgage industry and a title industry (amongst many others housing related) – other than the obvious foreclosures and short sales which are typically channeled to “insider” mills.

    (check out: – there’s a great set of links on the right)

    So why do you suppose consumers are required by banks and lenders to pay upwards of $300 for a biased and rigged appraisal? AVM’s and data portals are simply a compilation of public record. Property value information is stripped from local property appraisers office and tax collectors office websites and inserted into a fancy data model and voila’ AVM. UP UP UP and AWAY!!! Only takes one house in the neighborhood to set the new Guinness Book world record for highest sales price and there goes the neighborhood (and city and county) comps. They have literally hijacked the appraisal industry and what’s worse… no mention of the 10,000+ appraisers that have signed a petition to express concern about pressure to “hit the number” or risk losing work. A lot of people displaced in that side of the business, for being honest about property values, very sad.

    In retrospect the most ironic part of my journey happened when I tried to explain over and over to my servicer that I saw Pres George W Bush and Henry Paulson talking about programs that will help me stay in my home (and adjust the principal balance). I had to send their executive resolution group links to the videos by email – they said they hadn’t heard of any such program. I have been humbled by all of this and outraged at the same time. Originally I was thinking this fallout was the result of shoddy appraisal regulation, what I was seeing was only the tip of the iceberg. It wasn’t until I met Mario Kenny of the Rapoport Law Group that I realized it was not just me that smelled a rat. To Mario and Dawn Rapoport – I am very thankful to have met you both.

    Loss of job -75,000 , Loss of home -200,000, Loss of car – 8,000, Divorce Settlement (TBD)

    For everything else there’s validation and redemption… priceless!!!

    PS – If you take $1 Million dollars and put them end to end you’d have a line about 95 miles long OR about an hours drive.

    If you take $1 Trillion dollars and put them end to end you’d be able to circle the earth 4,000 times.

    Too bad we all can’t open a casino

  7. A loan mod? who’s better off with a loan mod? where they take you out of a situation where they can’t foreclose, and put you in a proper one that they can.

    I am glad she got one instead of fighting the fraud filled one’s that she had, she rolled over for them X multple.

    Don’t worry banks will get em. Daniel Sadik who run Quick Loan Funding into the ground got a loan mod too. I guess he knows where the bodies are buried.

  8. this straight out of her “oficial” website, will make you go Hmmmmmm, twice!!

    “Welcome to the official website of the 37th Congressional District of California! Since being elected to Congress, I have committed myself to working for you and responding to your needs and the needs of our community. As your Representative in Congress, I will fight everyday to improve our nation’s transportation systems and infrastructure, provide economic opportunities, increase our commitment to law enforcement, strengthen our educational system, and promote access to health care for each of our citizens.
    On this website, you will find contact information for our Washington, D.C., and California offices. In addition, my legislative priorities, constituent services, and details about my ongoing district and congressional projects are available.
    It is an honor to serve you.”

    Hmmmmmmmmmmmmmm…..maybe we should all write to her and ask the secrets to succesfully get a Loan Mod so fast, furthermore why don’t we ask her to get it done for us, there yaaa goooo! that’ll be even better! , but wait, why don’t we ask her to help stop or reverse our foreclosures just like she did with hers??? after reading the introduction at her website, i have ZERO doubt that she’ll refuse to help us all to get our homes back!!

  9. What a shocker!!! i have not ever seen anything like this neither have i ever heard politicians getting preferential treatment!!! this simply proves ‘AGAIN” what we americans already know and have known forever, politicians do not work for us “the people” they work for themselves and will always. America, we need to unite and fight as a whole this crazy evil machine, I don’t see any other way to defeat it, one at the time will not make the cut. How much longer will we take it?

  10. I would then tend to believe that she would vote for the lenders in any legislation that may come across her desk.

    I though we were all equal under the law. Well that is when I was naive, now I understand that one has to fight and keep on fighting until the end. And then start again. These congress peole and senators live in a different world under different rules and with all the privilege their positions makes them see their surroundings and the pleas from those who like us are troubled, just a nuisance.

    Would you vote for HER?
    I will not, she is as I see it tainted.

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