Congresswoman "Walks Away" from Curtis Park Home; Merced Hits 50% off Peak

From Capitol Weekly (hat tip JC):

As the real estate market softened in 2007, the new owner of a three-bedroom, 1,600-square-foot house in Sacramento's Curtis Park neighborhood ran into trouble. The house that was purchased for $535,000 in January had lost equity. The owner fell behind in her payments, and eventually, the bank seized the home.

What makes this story different from the thousands like it is that the owner of this house was a member of Congress. The story of the foreclosure of Long Beach Democrat Laura Richardson's Sacramento home is a tale of a real estate market gone sour...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.
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"It's kind of silly. You would think people who are making decisions for others would be able to make good decisions for themselves," she [the former owner] said. "She should have known what she could afford and not afford."

Steepest price declines in the nation - check
Home of the most hated flipper in the nation - check
First Congressional Rep. to walk away from home - check

UPDATE #1: Max has more on the story at SacRealStats.

UPDATE #2: Richardson responds - From the AP (hat tip LA Land):

In a statement issued Wednesday, Richardson blamed that constant job-shifting for the financial problems related to the Sacramento property. She said the home was not in foreclosure and had not been seized.

"I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement—with no special provisions," Richardson said. "I fully intend to fulfill all financial obligations of this property."
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Richardson's chief of staff, Kimberly Parker, told the AP that the mortgage on the home had been sold but the house had not. The Sacramento County Assessor's Office continues to list Richardson as the owner, even though the May 19 document on file at the Recorder's Office states that Red Rock Mortgage bought the home at public auction.
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Records on file at the Sacramento County Tax Collector's Office also show Richardson is delinquent in paying $8,950 in property taxes.

Also this video clip from CBS13: Congresswoman Defaults On Sacramento Home

UPDATE #3 (Thursday): Capitol Weekly responds

In other news, Merced home prices broke the 50% off peak mark. From the Modesto Bee:

Stanislaus County homes sold for a median $225,000 last month....At the market peak, Stanislaus homes sold for a median $396,000. That's a 43.2 percent decline in 2½ years. San Joaquin County prices have dropped even more. Last month, the median sales price hit $245,000....San Joaquin homes peaked at $451,500, but prices have plunged 45.7 percent since. Merced County is even worse. Its homes sold for a median $186,000 last month....Merced's homes peaked at $382,750 before plummeting 51.4 percent.
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Just released first-quarter 2008 calculations from the National Association of Home Builders-Wells Fargo Housing Opportunity Index show that the percentage of affordable homes has more than doubled in the valley since the fourth quarter of 2007. The new figures show median-income Stanislaus County families could afford to buy 36.2 percent of the homes sold in the county this January, February and March...Merced and San Joaquin counties have seen similar shifts in affordability. Median-income families can afford 28.3 percent of Merced homes and 35.5 percent of San Joaquin homes.
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While the real estate market downturn has increased affordability, Stanislaus families had a much easier time buying homes 10 years ago. During the first quarter of 1998, nearly 80 percent of all Stanislaus homes were affordable for median- income families.

Chart of Stanislaus County's Affordiability Index since 1996.