Here at the Mercury we've done a great deal of reporting on the foreclosure crisis affecting ordinary Portlanders, but this afternoon's breaking story is undoubtedly the saddest sign of the times yet: even Mayor Sam Adams has joined the ranks of people in our city whose houses are being targeted for foreclosure.
Like over 200 people in Multnomah County last week, Adams' Kenton house is on this morning's Multnomah County list of homes where the lender has filed a "notice of default." That means that Adams has defaulted on the terms of his agreement with his lender. In this case, he is listed as being behind on his payments by $4995.15. Adams' annual salary is $118,144, the monthly payment on his mortgage is $959.81, according to the mayor's default trust deed, obtained from the county this morning.
Unless Adams can resolve the outstanding default on his mortgage, his house is scheduled to be auctioned on the steps of Multnomah County Courthouse on the morning of October 13th at 10am—just two blocks down the street from city hall.
Adams bought the house in November 2003 for $130,000, and his first loan amount was $104,000 at an adjustable rate of 4.5%, according to county documents. In 2004, Adams did a "bargain of sale" on the property to take full responsibility for the loan after splitting with his former partner, Greg Eddie. The property is now worth around $212,000, according to Realquest.com, an online valuation surface.
"Banks in this market right now are very aggressive at trying to resolve issues with their borrowers," says Fred Stewart, a realtor who runs the website multnomahforeclosures.com. Stewart releases foreclosure information on a weekly basis and happened to come across Adams' name on the list this morning. He also ran for City Commissioner against Nick Fish in last year's election, and endorsed Adams for mayor.
On the one hand Stewart thinks Adams' predicament is indicative of the current market. "He's a VIP, and this is a very small amount," says Stewart. "It's just $5,000. Some banks, you can't even get them to get out of bed for that little." At the same time, Stewart is concerned about his mayor, he says. "The only time banks do a notice of default is when they're trying to work with their customer but they've given up," says Stewart. "I'm sure they would rather work this out than foreclose on Sam."
"I can't see any good reason for Sam to go into foreclosure," Stewart continues. "To me, this just shows that he's under stress, like a lot of people in Portland, and that's not good."
"He's going to have to work out an agreement with the bank," says Stewart. "But no bank I know wants to be the one to foreclose on the mayor of one of the country's top 30 cities."
Adams had to declare himself bankrupt in 1989, "swamped by a combination of medical bills and high credit card debt," according to the Oregonian. Adams has repeatedly said he would not allow the Breedlove scandal to affect his ability to run the city, and indeed, was widely praised for crafting a shrewd city budget last month. Pitchforks and torches aside, the Mercury has been more impressed than others by Adams' first six months in office from a policy perspective.
One possibility for the notice of default is that Adams is swamped by personal legal fees. He has retained the services of a private attorney, Robert Weaver, to defend himself in Attorney General John Kroger's investigation into the Breedlove scandal.
"The recall has always been concerned about Adams' willful lies to get elected, his orchestrated cover up and abuse of power," says Jasun Wurster of the Recall Sam Adams campaign, which plans to start collecting signatures on July 7. "We are a very positive campaign and will continue to run this recall questioning Adams' lack of public trust and political capital based on his civic transgressions. However we feel this latest news is indicative of his personality, and have serious concerns with him being able to balance the city's checkbook."
"This is a private issue, but if you must know, I've had to pay some significant upfront legal fees, and now I'm getting caught up on my mortgage payments," says Adams, reached via cellphone this afternoon. The mayor would not comment further on the situation.