What Does a Member of Congress and a former Major League Baseball Player Have in Common?
1 Comment Published by May 27th, 2008 in 100% Financing, Celebrity REOs, Foreclosure Activity, Personal Insights, Trustee Sale. byAnswer: Both of them have had their homes foreclosed upon.
Jose Conseco, a former American League MVP, in remarks made on the TV show “Inside Edition”, said that he “walked away from his $2.5 Million Encino home “because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.” Didn’t make sense to pay his mortgage (hmm) on a home that was basically owned by someone else (Who would that have been? Maybe the bank that lent him the mortgage?).
Meanwhile, USA Today reported that “The credit crunch is hitting the halls of Congress, with reports from California that a member of the House lost her house in foreclosure earlier this month.” Congresswoman Laura Richardson had her home foreclosed upon as a result of borrowing $60,000 out of it for her congressional campaign. She had initially taken out a loan out on her three bedroom home in Sacramento 17 months ago for $535,000 (100% financing), and then borrowed an additional sum bringing the indebtedness to $578,000 when a “Notice of Trustee’s Sale” was published in March of this year. Richardson who earns $169,300 a year as a congresswoman was also reportedly behind on her taxes by almost $9,000. “Washington Mutual ended up writing off nearly $200,000 of that debt to get rid of the home,” according to the Press-Telegram.
What ever happened to the notion of noblesse oblige? The idea of living up to your obligations? If our elected politicians and sports celebrities can walk, then I can certainly balk, or at least blog about it.
Seems to me that these are two professions who need to have a firm grasp on the nature of their finances.
The members of the governing bodies of state and federal legislatures are presumed to be fiscally responsible because they are allocating the dollars we pay in hard-earned federal and state taxes.
Professional athletes in baseball, football, basketball, etc. make a LOT of money. Even if they don’t manage their own finances, they probably have a CPA on their staff of professional advisors.
“Just walking away” doesn’t sound like advice a CPA would give to a client. Maybe Laura and Jose aren’t worried about their FICO score/credit rating. Maybe they have no intention of buying another home. Maybe they can get quality loans in spite of their financial peccadillos, because of who they are.
But for me… I need a good FICO score to get a low-cost loan on a home or a new car. I don’t have the luxury of being a celebrity that can break the rules.
Can we make the rules the same for everyone?