Filed under: Analyst upgrades and downgrades

MOST NOTEWORTHY: Lloyds TSB Group, OmniVision and National Instruments were today’s noteworthy downgrades:

• Credit Suisse downgraded shares of Lloyds TSB Group (NYSE: LYG) to Underperform from Neutral as they see greater mortgage risk and capital issues.
• Oppenheimer cut OmniVision (NASDAQ: OVTI) to Perform from Outperform to reflect challenging conditions in the low-end Chinese handset market.
• Thomas Weisel downgraded shares of National Instruments (NASDAQ: NATI) to Market Weight from Overweight as they expect EPS growth as operating margins approach cyclical peaks.

OTHER DOWNGRADES:

• Air France-KLM (OTC: AFLYY) was cut to Hold from Buy at Citigroup and to Neutral from Buy at Merrill.
• Exelon (NYSE: EXC) and Edenor (NYSE: EDN) were both downgraded at Citigroup to Hold from Buy.
• Goldman lowered Grupo Aeroportuario del Pacifico (NYSE: PAC) to Neutral from Buy.

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Filed under: Earnings reports, Analyst upgrades and downgrades, Johnson and Johnson (JNJ), Boston Scientific (BSX), Technical Analysis, Stocks to Buy

Medtronic (NYSE: MDT) is a medical technology company, specializing in a variety of implantable biomedical devices. Leading products include pacemakers, stents, catheters, glucose monitoring systems and insulin pumps. The firm’s Cardiac Surgery segment offers products for the repair and replacement of heart valves, surgical accessories, and surgical ablation products. A Physio-Control unit provides external defibrillation and emergency response systems. Medtronic sells its products to hospitals, clinics, third party healthcare providers and governmental healthcare programs. Boston Scientific (NYSE: BSX) and Johnson & Johnson (NYSE: JNJ) are major competitors.

Investors were pleased last week, when Medtronic announced fiscal Q4 EPS of 78 cents and revenues of $3.86 billion. Analysts had been expecting 72 cents and $3.72 billion. Management also guided FY09 EPS to $2.94-$3.02 ($2.96 consensus) and FY09 revenues to $15-$15.5 billion ($15.14 consensus). UBS subsequently reiterated its “buy” rating on the shares.

Continue reading Medtronic (MDT): Shares define bullish flag

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Bloomberg reports that Countrywide’s President Dave Sambol won’t stay after the merger goes through.  Some head has to roll for the disastrous lending practices that have built up at Countrywide over the years.  I guess that’s what you get for “protecting the house.”

Bloomberg on Sambol’s exit at Countrywide:

Countrywide Financial Corp. President David Sambol, who became a target for critics of the mortgage company’s loan practices and executive pay, will leave after Bank of America Corp.’s takeover instead of running the combined home lending operations as originally planned.

Barbara Desoer, Bank of America’s chief technology and operations officer, will lead consumer real estate operations and Sambol is retiring, according to a statement today from the Charlotte, North Carolina-based bank. Desoer, 55, will report to Chief Executive Officer Kenneth Lewis.

Sambol and Countrywide Chief Executive Officer Angelo Mozilo have been under fire since Bank of America agreed in January to buy Countrywide for about $4 billion. Lax lending by their company, the biggest U.S. home lender, has been blamed for contributing to record U.S. foreclosures, and critics including U.S. Senator Charles Schumer had asked Bank of America to reconsider the decision to put Sambol in charge.

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Filed under: Products and services, Microsoft (MSFT)

We’ve all been hearing it — Microsoft Corp.’s (NASDAQ: MSFT) failure to win over consumers and business users with the Windows Vista operating system is causing sales of the older Windows XP operating system to stay afloat. Microsoft doesn’t want this, of course. It’s true that the software maker has shipped more than 140 million copies of Windows Vista, but since Vista is the default operating system on millions of PCs, it’s pretty easy to do that.

Some corporate customers, though, have bypassed Windows Vista completely and will wait until the next round. This is Microsoft’s Achilles’ heel — some companies won’t fix something that isn’t broke. General Motors Corp. (NYSE: GM) even says that “We’re considering bypassing Vista and going straight to Windows 7,” in reference to Microsoft’s next operating system due sometime in the future. Yes, many large companies are indeed taking Windows Vista in — but it’s mostly due to not having much choice with changing out entire computing infrastructures for a global corporation. It takes a visionary IT leader to do that, and those are hard to come by in many cases.

And therein lies a big problem for Redmond. If customers aren’t excited about its new operating system, why would they think Windows 7 will be any better? It’s hard to fathom Microsoft pouring $5 billion into Vista and being shunned left and right. The software maker’s operating system and Office productivity business subsidizes all its other products where it may make little or no money. But what if Windows is destined to become a slow-growth industry? If that’s the case, where is Microsoft’s growth engine going to come from in 2010? 2012? It’s making gobs of money now. Will it last? When its main product underwhelms much of the market, the question has to be asked.

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Some of this stuff you simply cannot makeup. At this point, I think the majority of folks have come to realize that any legislation trying to help homeowners and lenders is guided by politics rather than good economics. There is a fascinating incident that occurred where our favorite CEO appears to have […]
Related Posts:
■Real Homes of Genius: $1 Million Discount for a 948 Square Foot Long Beach Condo!
■Digging into Countrywide: When Half Your Loans are in California and Florida.
■The Housing Wave of the Future: Two Main Mortgage Tsunamis.
■Foreclosures jump statewide by 40% in California in just one quarter! Welcome to California’s Gold!
■When will my home cost me an ARM and a leg?

Some of this stuff you simply cannot makeup. At this point, I think the majority of folks have come to realize that any legislation trying to help homeowners and lenders is guided by politics rather than good economics. There is a fascinating incident that occurred where our favorite CEO appears to have replied to the wrong e-mail. Whoops! We have all witnessed this type of e-mail in our working lives. I recall being Cc’d (carbon copied) on an e-mail with a dozen or so other’s about a colleague’s retirement. One of those on the Cc list accidentally replied to all and wrote “thank god this bi— is out!” clearly intending the e-mail go to one of her contacts on the list and obviously not to the main retiree. Hilarity ensued after that.

Here is the rundown:

1. 1. Borrower takes out a loan with Countrywide
2. 2. Borrower has problem paying loan back
3. 3. Borrower e-mails numerous Countrywide e-mail addresses including Angelo Mozilo about a loan modification.
4. 4. CEO forwards message to correct party.
5. 5. Sends another message stating that he suspects folks are using form e-mails and ends the message with “disgusting.”
6. 6. E-mail not intended for all to see.
7. 7. E-mail now public
8. 8. Hilarity ensues.

The original post was made over on a Loansafe.org forum where borrowers in trouble were trying to get advice on the best way to go about doing loan modifications. Loss mitigation is a treacherous road to go down for the uninitiated so this borrower sought out help and found a community of others online. Here is the message sent back to the borrower from Mr. Mozilo:

“To Angelo_Mozilo@countrywide.com
cc
Subject Re: bailey acct# xxxxxxxxxx
Interesting to find that you think my letter is disgusting. I will send this on….

Angelo_Mozilo@countrywide.com wrote:

This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting.”

You really need to read the entire thread. There needs to be a mandate that all CEOs have the reply to all button removed from their Outlook e-mail accounts. Clearly this borrower was qualified enough to land a Countrywide mortgage but now they find it “disgusting” that someone in distress is asking for help? The Los Angeles Times is all over this puppy:

“Apparently clicking “reply” when he meant to hit “forward,” Countrywide Financial Corp. Chairman Angelo Mozilo ignited an online furor Tuesday by describing a mortgage customer’s plea for help as a “disgusting” example of form letters inundating the Calabasas home lender.

Mozilo’s e-mail rocketed back to the customer, Daniel Bailey Jr., who had asked Countrywide to modify the terms of his loan so he wouldn’t lose his home of 16 years…

…Bailey and Mozilo couldn’t be reached for comment. Late in the day, the lender issued this statement: “Countrywide and Mr. Mozilo regret any misunderstanding caused by his inadvertent response to an e-mail by Mr. Bailey. Countrywide is actively working to help borrowers, like Mr. Bailey, keep their homes.”

This is another X-factor with the internet that tiny incidents like this can go viral even before the public relations department can devise a strategy to react. You really have to love that response from Countrywide and I bet they regret that “misunderstanding” from this e-mail. My other observation is that Mozilo seems to be rather accessible if he is dealing with e-mails straight from the public.

Let us Remember Enron Tapes

Flaps like this happen all the time. People forget why they teach aspiring shady folks through the movies to use public pay phones and stay off e-mail or anything that is written. You know how we feel about this entire housing market debacle and what has been going on through the decade should be enough evidence to put tons of people away behind bars. Yet sometimes the thing that opens the public flood gates of anger is arrogance. Let us remember those Enron tapes given that it is appropriate with the ever increasing price of energy:

“(CBS) When a forest fire shut down a major transmission line into California, cutting power supplies and raising prices, Enron energy traders celebrated, CBS News Correspondent Vince Gonzales reports.

“Burn, baby, burn. That’s a beautiful thing,” a trader sang about the massive fire.

Four years after California’s disastrous experiment with energy deregulation, Enron energy traders can be heard - on audiotapes obtained by CBS News - gloating and praising each other as they helped bring on, and cash-in on, the Western power crisis.

“He just f—s California,” says one Enron employee. “He steals money from California to the tune of about a million.”

“Will you rephrase that?” asks a second employee.

“OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day,” replies the first…”

Bwahaha. Oh that is funny! Do you get that humor? The poor masses get screwed and these traders make money. It is like a reverse Robin Hood. They won’t call it screwing you over but they’ll label it arbitrage. Kind of like labeling toxic destructive waste mortgages as Pay Option ARMs. Let us read a little more of what these comedians had to say:

“They’re f——g taking all the money back from you guys?” complains an Enron employee on the tapes. “All the money you guys stole from those poor grandmothers in California?”

“Yeah, grandma Millie, man”

“Yeah, now she wants her f——g money back for all the power you’ve charged right up, jammed right up her a—— for f——g $250 a megawatt hour.”

And the tapes appear to link top Enron officials Ken Lay and Jeffrey Skilling to schemes that fueled the crisis.

“Government Affairs has to prove how valuable it is to Ken Lay and Jeff Skilling,” says one trader.

“Ok.”

Fantastic rhetoric! Falls on the ears like Shakespeare. This is the problem with letting folks run lose like a bunch of drunken sailors. Their actions behind their computer terminals have massive impacts in the real world. They should be punished as such. There is a fantastic hour-long radio show talking about the entire housing debacle over at This American Life. You really need to listen to the entire thing. We have a young college grad in the mortgage industry bragging about his $50,000 to $75,000 a month pay checks while partying with B-list celebrities like Terra Reid and drinking thousand dollar bottles of Kristal. He is now back at home looking to walkaway from his mortgage. Easy come easy go. Let us recall a bit more of those Enron tapes just to remember how corrupt unmitigated gambling can get:

“It’d be great. I’d love to see Ken Lay Secretary of Energy,” says one Enron worker.

That didn’t happen, but they were sure President Bush would fight any limits on sky-high energy prices.

“When this election comes Bush will f——g whack this s–t, man. He won’t play this price-cap b——t.”

Crude, but true.”

And there you have it. Sort of reminds you of when Ameriquest dumped mortgage documents straight into the garbage:

*Click to watch amazing sophisticated mortgage security.

All this courtesy of the folks that brought you the credit and housing bubble. Now that is truly disgusting.

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Related Posts:
■Real Homes of Genius: $1 Million Discount for a 948 Square Foot Long Beach Condo!
■Digging into Countrywide: When Half Your Loans are in California and Florida.
■The Housing Wave of the Future: Two Main Mortgage Tsunamis.
■Foreclosures jump statewide by 40% in California in just one quarter! Welcome to California’s Gold!
■When will my home cost me an ARM and a leg?

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Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Motorola (MOT)

Comments by Microsoft (NASDAQ: MSFT) CEO Steve Ballmer may leave raider Carl Icahn in a difficult position. Ballmer says his company will not bid for Yahoo! (NASDAQ: YHOO) Ballmer made his comments overnight from Israel.

According to Reuters, Ballmer said “Yet, we are trying to have discussions about deals with Yahoo that might create value but not a whole acquisition of the company,” he said without elaborating further.

It is generally understood that Icahn and his fellow investors do not think they get much benefit from their move to control Yahoo! if they do not get Microsoft to come back to the bargaining table with a $33 bid. A link-up with Microsoft or Google (NASDAQ: GOOG) in the search business may save Yahoo! some money, but not enough to keep its share price high. Before the Microsoft bid, Yahoo! traded at $19. $27.48.

The news from Microsoft points out the risk of being a raider. Icahn put money into Motorola (NYSE:MOT) thinking the company would spin-off its handset unit. Sales at that business are so bad that selling it has become almost impossible.

Icahn wins his share, but Yahoo! may not get onto that list.

Douglas A. McIntyre is an editor at 247wallst.com and author of Ten Stocks Under $10.

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Filed under: Sears Holdings (SHLD), Options

Sears Holding (NASDAQ: SHLD) is recently trading up 42 cents to $87.51 as shares near 45-month low.

SHLD is scheduled to release Q1 results on May 29.

SHLD call option volume of 13,028 contracts compares to put volume of 6,312 contracts. SHLD June call option implied volatility is at 51, puts are at 57. SHLD average option implied volatility over the last 26-weeks is 45 according to Track Data, suggesting larger price movement. SHLD puts are priced higher than calls because SHLD is difficult to borrow.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Earnings reports, Google (GOOG), Campbell Soup (CPB), Limited Brands (LTD), salesforce.com inc (CRM)

If you were paying close attention to this column last week, you would have sidestepped some of the pain and misery investors in many of the stocks discussed have suffered lately. Of late, we have seen the general direction of the markets turn positive, even in the face of news to the contrary.

Perhaps it is because investors have an appetite for stocks, since there seems to be few investment alternatives. Real estate is off limits and the yield on bonds and other fixed-income investments is pathetically low.

The theme for the week ahead is SMOOTH SAILING. In this week’s column, we delve into some stocks that will be announcing earnings, and that may benefit from the changing tide of investor sentiment. To be sure, there will be several areas of choppiness as we continue to be bombarded by the stormy realities of a turbulent economy.

Monday, May 19

The chart for Campbell Soup (NYSE: CPB) looks M’m M’m good. Sporting a smooth line with nary a ripple over the past 12 months, management has done a great job at keeping both company earnings and share price up, even in the face of significant food inflation. While shares have been condensing during the past few months, recently they have been rising with a series of higher highs and higher lows. Be on the outlook for earnings of 44 cents per share on revenue expectations of $1.89 billion. Now that I think of it. That’s a lot of soup wrapped in tin-plated steel — one of many materials that has seen its price almost double in the past six months.

Excel Maritime Carriers (NYSE: EXM) is part of the shipping industry that has been cruisin’. Shares are up from a September 2006 low of $8 to a recent level of $52. After floating down violently during the first quarter of 2008, shares have made a turnaround, as there are high expectations for the dry-shippers. It is curious how a company with such a massive fleet of ships maintains such extreme profitability with oil prices above $120. Monday will set the course as earnings are estimated to be $1.79 per share for the quarter, up from 61 cents in the year-ago period. This is on revenues of only $61 million for a company that now has a market cap of $1.1 billion. If shares do not meet or beat, watch out below!!

While we are out at sea with the shippers, the big daddy DryShips (NASDAQ: DRYS) will be coming in with its quarterly numbers after the close. Expectations are running high, and First Call is estimating $4.05 per share, which is a 400% increase from the same period a year ago. The shares have a classical chart formation of a double-bottom with a break above the mid-term resistance. This bullish pattern has had all the makings of a solid run but may hit overhead resistance at this level. (Sorry I can’t go into more depth on chart pattern recognition here, but if you’re interested in learning more, you could read Chapter 3 of my book, The Disciplined Investor: Essential Strategies for Success.)

Tuesday, May 20

On the sundeck, silicon wafers are drawing in the sun’s energy and converting it to a more usable form by products made by China Sunergy (NASDAQ: CSUN). Analysts do not predict that the company will be profitable this quarter, but that does not seem to matter these days as shares are being bid up 50% from a recent consolidation point of $8. Look for an announcement showing a loss of 5 cents per share on $73 million of revenue.

After coming back from a long cruise, many people have thought of going back to living in a factory-built, modular home but did not know where to go for that special touch. Good news, as Palm Harbor Homes (NASDAQ: PHHM) might actually have the answer. Yet, shares have been watered down of late as the housing market has been difficult on all components within the sector. Yes, even the luxury modular home companies. Interestingly, analysts are seeing a loss approaching 34 cents per share on $123 million of revenues.

Wednesday, May 21

When the economy enters a time of recession, shoppers look for bargains. BJ’s Wholesale Club (NYSE: BJ) may have just the right bait to bring in the fish as they have 177 warehouse shopping stores in 15 states with a total of 8.8 million members. Sales have been consistent and earnings growth has been strong. With little debt and a chart that is showing a strong base, this could be a winner during this wave of the economic cycle. Watch the earnings release for clues as to the near-term direction. First Call is showing a 27 cents EPS for the period on huge revenue of $2.26 billion.

Ever since Google (NASDAQ: GOOG) announced a partnership with Salesforce.com (NYSE: CRM), the tide has been rising for shares. Making new highs on a regular basis, Salesforce has one of the best online contact management solutions available for companies of any size. In the ultimate battle for the desktop over the webtop, Salesforce is a force to reckon with. The company has quarterly earnings expectations of 7 cents, which is sevenfold higher than last year, and revenue that is expected to grow to $235 million for the period. I suppose that is what happens when a company has no competition and a great product.

There will be plenty of other announcements today in the retail sector that will be watched carefully for further clues on the consumer and the general economy. Take note of the following as there has been a good deal of negative sentiment towards this sector:

• Dillards (NYSE: DDS) $0.21 EPS on $1.71 billion of revenue
• Hot Topic (NASDAQ: HOTT) -$0.04 EPS on $159 million of revenue
• Limited Brands (NYSE: LTD) $0.08 EPS on $1.90 billion of revenue
• Charming Shoppes (NASDAQ: CHRS) -$0.06 EPS on $725 million of revenue
• Ross Stores (NASDAQ: ROSS) $0.58 EPS on $1.55 billion of revenue
• Saks (NYSE: SKS) $0.16 EPS on $840 million of revenue

Thursday, May 22

The day is loaded with more retail announcements. The ones to watch include:

• AnnTaylor (NYSE: ANN) $0.46 EPS on $593 million of revenue
• Bon-Ton (NASDAQ: BONT) -$2.25 on $715 million of revenue
• Stein Mart (NASDAQ: SMRT) -$0.04 EPS on $366 million of revenue
• Aeropostale (NYSE: ARO) $0.25 EPS on $327 million of revenue
• Gap Inc. (NYSE: GPS) $0.31 EPS on $3.43 billion of revenue
• Pacific Sunwear (NASDAQ: PSUN) -$0.10 EPS on $265 million of revenue
• Zumiez (NASDAQ: ZUMZ) $0.03 EPS on $78 million of revenue

Also look for the earnings from poultry producer Sanderson Farms (NASDAQ: SAFM). The company has been doing well, even into rising corn and feed prices. Estimates are for a loss of 7 cents on $435 million of revenue. Investors may get chicken if they see that the margins have been watered down this quarter. Even so, the balance sheet is strong and the outlook is stable.

Disclosure: Horowitz & Company clients may hold positions in some of the stocks mentioned as of the publish date.

Andrew Horowitz is a money manager and author of The Disciplined Investor: Essential Strategies for Success.

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As we covered a few days back, Congresswoman Richardson’s spared foreclosure on her Sacramento home by a serendipitous loan modification made waves when the first report suggested that her home had gone in to default. Richardson denied the home went in to foreclosure and she was generally given the benefit of the doubt by this blog and others. Foolish us, when did we ever begin trusting the words from the lips of politicians?

Richardson went back on her initial statement to say that the home did go in to foreclosure but the foreclosure was ‘improper’ because she had reached an agreement with her lender to avoid the foreclosure.

From the LA Land blog which has been all over the Richardson foreclosure story:

From the Associated Press tonight: “Rep. Laura Richardson claimed Friday that her Sacramento home was sold into foreclosure without her knowledge and contrary to an agreement with her lender. She said that she is like any other American suffering in the mortgage crisis and wants to testify to Congress about her experience as lawmakers craft a foreclosure-prevention bill.”

Richardson, a Democrat from Long Beach, had earlier denied reports that the Sacramento home was in foreclosure, even as the buyer of the home stepped forward and publicly offered to resell it to her for $535,000, the same price she paid for it in early 2007.

A new wrinkle tonight: The blog Foreclosure Truth reports Richardson also fell behind on payments on her principal residence in Long Beach, and faced possible foreclosure on that home as well: “Turns out her home in Long Beach was also recently in foreclosure with a Notice of Default filed by Title Trust Deed Service Company with the L.A. County Recorders office on March 31, 2008 as document number 546450 on behalf of Litton Loan Servicing. According to that document she was $19,921.74 behind on that mortgage as of March 28, 2008. Checking on the trustee sale number for this default it appears that this foreclosure action has in fact been cancelled — quite possibly due to a loan modification as claimed.” Richardson’s office has not responded to L.A. Land’s request for comment on that report.

Now a Daily Breeze report shows that Richardson has defaulted not just on her Sacramento property but on three California properties.

For example, she refused to discuss the mortgage terms on the Sacramento house, refused to say how many payments she

had made, and refused to say when she learned that the mortgage was in default.A notice of default was issued in December, but Richardson offered no evidence that she had taken any remedial action before April. By then, the auction had already been scheduled for one month.

The home, which Richardson bought in January 2007 for $535,000, sold at auction on May 7 to a real estate investor for $388,000. The lender, Washington Mutual Bank, took a loss of nearly $200,000 on the deal, and

the buyer, James York, agreed to pay her property tax bill.Richardson said that she was not aware the home had sold until she was contacted by reporters this week. She produced correspondence from Washington Mutual Home Loans, dated April 17, that indicated her loan was reinstated and the auction would be put on hold until June 4.

She produced an e-mail, dated Thursday, indicating that she was trying to work with the lender to have the foreclosure rescinded.

A spokeswoman for Washington Mutual Bank, Sara Gaugl, declined to comment on the matter.

“We have not received consent from Ms. Richardson that would allow us to discuss her loan situation,” Gaugl said.

County records indicate that the San Pedro home went into default in September 2007, at which point Richardson was behind on her payments by $12,410.71, and had made no payments since June.A notice of trustee sale was issued on April 17, and an auction was scheduled for May 14 on the courthouse steps in Norwalk. The outstanding loan balance was $367,436, on an original 2005 loan of $359,000.

However, the auction was put on hold.

Richardson produced records from Wells Fargo Bank, which holds the note on her San Pedro home. That document, dated March 21, indicated that Richardson had qualified for a loan modification that would prevent the foreclosure from going forward.

Cal Western Reconveyance Corp., which was responsible for collecting the debt, confirmed that a hold had been placed on the auction, and the auction date had been postponed to July 14, pending a workout of the loan.Again, Richardson produced no document to confirm that she took any remedial action on the San Pedro property before March.

The Long Beach home, which is Richardson’s primary address, went into default on March 28. Richardson had not made a payment on the house since November, and owed $19,921.74 on the property. Three days later, the default was rescinded, indicating that Richardson had arranged to make the payments.

While Richardson did not apologize for her actions, she did attempt to explain them.

Tanta from Calculated Risk asks some important questions about what the Congresswoman was doing buying the Sacramento home in the first place.  The Congresswoman used 100% financing and Tanta brings in to question how she qualified for the loan in the first place.

I have no idea what loan terms Richardson got for a 100% LTV second home purchase in January 2007, but I’m going to guess that if she got something like a 7.00% interest only loan (without additional mortgage insurance), she got a pretty darn good deal. If she got that good a deal, her monthly interest payment would have been $3123.75. Assuming taxes and insurance of 1.50% of the property value, her total payment would have been $3793.13.

The AP reports that Richardson’s salary as a state representative was $113,000 in 2007, and she received $20,000 in per diem payments (which are, of course, intended to offset the additional expense of traveling to and staying in the Capitol during sessions). I assume the per diem is non-taxable, so I’ll gross it up to $25,000. That gives me an annual income of $138,000 or a gross monthly income of $11,500.

The total payment on the second home, then, with my sunny assumptions about loan terms, comes to 33% of Richardson’s gross income. I have no idea what the payment is for her principal residence in Long Beach. I have no idea what other debt she might have. I am ignoring her congressional race and job changes and all that because at the point she took out this mortgage, that was all in the future and Richardson didn’t know that the incumbent would die suddenly and all that. I’m just trying to figure out what went through this woman’s mind when she decided it was a wise financial move to spend one-third of her pre-tax income on a second home. (There’s no point trying to figure out what went through the lender’s mind at the time. There just isn’t.)

The next, important question is - did the U.S. Representative commit loan fraud by using stated income that was inflated to complete the purchase of these homes?  If she has committed loan fraud a la Casey Serin she should be immediately removed from her seat and prosecuted accordingly.

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