8th Dist. challenger lost condo to foreclosure

A suburban congressional candidate who's stressed the need for fiscal restraint lost a condominium to foreclosure last October, the same month he announced his bid for office, court records show.

Joe Walsh, the Winnetka Republican running against Democratic incumbent Melissa Bean in the 8th House District, used to own a condominium on the 1400 block of Sherman Avenue near downtown Evanston. The two-bedroom unit went into foreclosure in 2008 and Walsh was evicted last fall, Cook County circuit court records and real-estate reports indicate.

Court papers filed in September 2008 show he stopped making mortgage payments that May.

In a statement e-mailed Tuesday to the Daily Herald, Walsh admitted losing the condo.

"This experience helped me gain a better appreciation for the very real economic anxieties felt by 8th District families, many of whom are just a paycheck or two away from facing similar difficulties," Walsh said in the e-mail.

Walsh did not make himself available for questions. His statement did not explain why he failed to disclose the foreclosure during the primary campaign or why he chose to allow his mortgage to go into foreclosure.

Walsh defeated five other hopefuls to win the party's nomination on Feb. 2. Gene Dawson, the GOP's state central committeeman for the 8th District, said he wished he knew about Walsh's foreclosure before the primary showdown.

"I feel very strongly that any candidate for any elected position should disclose anything and everything that could be detrimental so they can go forward with a clear conscience," said Dawson, who is not related to a candidate named John Dawson who ran against Walsh. "I do not know what prevented Joe from disclosing the issue."

GOP leaders need to meet with Walsh and talk about the foreclosure and why he didn't tell anyone about it earlier, Dawson said. When asked if the party should ask Walsh to resign from the race, Dawson said "it's a matter that has to be taken under advisement."

A Bean spokesman declined to comment.

Walsh's residency was an issue during the primary. At public forums and on his campaign Web site, the 48-year-old Walsh billed himself as a Barrington-area native and barely acknowledged he lives well outside the district in Winnetka, something for which he was criticized in the media and by some political opponents.

Such a candidacy is allowed by federal law. Regardless, Walsh, who works in private equity funding, admitted he wouldn't vote for a candidate who lived outside the district and said he plans to move into the 8th District.

Walsh, whose full name is William Joseph Walsh, lived in Evanston when he ran for the 9th District congressional seat in 1996 and for the state House in 1998.

Real-estate industry records indicate Walsh purchased the Sherman Avenue condominium in 2004 for $320,500. He borrowed $288,450 to make the purchase, according to documents available at the Cook County recorder of deeds Web site.

He and his second wife, Helene, moved to Winnetka in 2006 and to his current home in 2009, a campaign spokeswoman said. Both homes have been rental properties, Walsh said.

They moved to Winnetka because they needed more space for their seven-person family, Walsh told the Daily Herald. The couple obtained a $303,500 mortgage for the Evanston property in September 2006, court documents show. Records didn't indicate whether this loan refinanced the first loan or was a second mortgage.

The Walshes intended to rent or sell the Evanston condominium but had no luck, Walsh said.

"Then the housing bubble burst and by 2008, with no buyers for my condo, I found myself struggling to keep up with two homes and five children," Walsh said in the statement.

A foreclosure lawsuit over the condominium was filed against the Walshes in September 2008 by HSBC Mortgage Corp., according to court records.

Walsh said he accepted responsibility and worked with his bank on the foreclosure. An attorney who represented the bank in the lawsuit could not be reached for comment.

At the time of the foreclosure, the principal balance due was an estimated $299,805. It was listed in court records as a non-owner occupied dwelling.

The foreclosure was finalized Oct. 13, 2009, and a sale of the property by the Cook County sheriff's office was approved, records indicate.

The Walshes were ordered out of the condominium the same day but legally had 30 days to vacate, records show.

The Federal National Mortgage Association, commonly known as Fannie Mae, now owns the condo, but it is under contract to be purchased by a new, unidentified owner, public real-estate records indicate.

A recent online listing price valued the condo at $274,900, far less than what Walsh paid for it.

Walsh has billed himself as a conservative candidate and has embraced the tea party protesters who've rallied against high taxes and government spending.

"I will fight to cut spending, reduce taxes and return to a balanced budget," Walsh told the Daily Herald in a candidate questionnaire last year. "Residents of the 8th Congressional District will benefit most from my efforts to lower taxes ... and eliminate the crushing debt that is being passed onto our kids and grandkids."

Walsh has been the focus of a few controversies during the roughly four months he's been a candidate.

In addition to being criticized for living outside the 8th District, Walsh took heat from some of the other GOP candidates for changing his views on some hot-button political issues, including abortion rights and whether assault weapons should be banned.

Walsh now opposes abortion and a weapons ban, but he didn't when he first ran for Congress in 1996. Earlier this year, he told the Daily Herald his views on abortion changed after a spiritual journey, and he shifted on gun control after being "educated" on the issue.

He also said he had a more liberal stance on gay rights in 1996 "because I was running in Evanston, Ill.," a reference to the largely left-leaning city.

Additionally, this past January, a Walsh campaign video was removed from YouTube and then Walsh's own Web site after a lawyer for the rocker named Joe Walsh accused the candidate of infringing on the copyright for the musician's classic rock song "Walk Away."

Although Walsh the candidate insisted the video would reappear on the Web, it hasn't.

Walsh also was sued by a former campaign manager who quit in December and then said the candidate owed him $20,000 for services. The case is pending in Cook County court.

The 8th District includes parts of Cook, Lake and McHenry counties. Bean, of Barrington, is seeking a fourth term. Green Party candidate Bill Scheurer of Lindenhurst also is running for the seat.

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<li><a href="/story/?id=363341">Joe Walsh statement on foreclosure <span class="date">[03/03/10]</span></a></li>

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