Democratic Congress Bailing out borrowers

One of the major arguments against the Democratic Congress' new bailout bill for homeowners and lenders is that it rewards irresponsible borrowers and speculators. Unfortunately for the Democrats, this report  has popped up  -- and been denied  -- of a newly elected California Congresswoman who bought a half million dollar loan with no down payment or evidence of her ability to pay back the mortgage. Oh, and she skipped on the loan. From the LA Times site:

Capitol Weekly reports that newly elected California Congresswoman Laura Richardson walked away from the mortgage on her $535,000 Sacramento home, letting the house slip into foreclosure and disrepair less than two years after she bought it with no money down.
Capitol Weekly wrote:
"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," the publication reports.

Richardson, a Democrat from Long Beach, declined to comment for the Capitol Weekly story, and her office did not immediately respond to a request for comment from LA Land.

Capitol Weekly, citing tax records at the Sacramento County assessor's office, reports "... in January 2007, Richardson took out a mortgage for the entire sale price of the house -- $535,000. The mortgage amount was equal to the sale price of the home, meaning she was able to buy the house without a down payment, even though the housing market was beginning to turn. A March 19, 2008 notice of trustee's sale indicates that the unpaid balance of Richardson's loan, which is held by Washington Mutual, is more than $578,000 -$40,000 more than the original mortgage."

In addition to 100% financing on the home itself, the report quotes the woman who sold the house to Richardson as saying she also gave Richardson $15,000 toward closing costs.

Taxpayers all over the country must be jumping with joy because of the fact that they're going to be bailing out the likes of California Congresswoman Laura Richardson in addition to the firm that lent her the money to buy a house she couldn't afford.  I wonder if the acclaimed author of the bailout bill, Barney Frank, is watching?

On the bright side, I suppose we should all be happy that we aren't bailing out the seller and her $11K as well.