DealZone

Wells Fargo’s Malibu mess

September 13, 2009

Partying bankers, a foreclosed mansion, Madoff victims and a ritzy Malibu neighborhood that’s home to Tom Hanks: Friday’s Los Angeles TImes story had a little something for everyone.

The paper reported that Cheronda Guyton, a Wells Fargo senior vice president responsible for foreclosed commercial properties, spent weekends at 106 Malibu Colony Road throwing “eye-catching” parties, one of which had guests arriving in a yacht.

Eyepopping pictures of the mansion are available on the realtor’s website.

The Wall Street Journal’s Deal Journal interviewed real estate agent Irene Dazzan-Palmer, who has been trying to sell the property:

It’s explosive because it happened in Malibu. We are a celebrity beach community. It’s also because these poor people lost their house and then a bank employee moves in. It leaves you with a bad taste in your mouth.

The mansion’s previous owners were forced into foreclosure because they were victims of Bernard Madoff’s Ponzi scheme.

Wells Fargo has launched an investigation.

Tell us your thoughts on this hot-button story.

Comments
21 comments so far | RSS Comments RSS

If it was not trashed (which it probably wasn’t) who cares?

Posted by windy spirit | Report as abusive
 

I don’t know anything about the ‘rules’ the high-fliers live under but I don’t see what the problem is with one of the top executives using it for parties. What the heck, I don’t even see a problem if they (the bank) decided to keep the darn thing for themselves, I assume they held the title to the property so what is the problem?

I’m only upset that I never got an invite!

Posted by William Langston | Report as abusive
 

It’s very obvious that the people who find this disgusting act to be ok have not ever worked hard for anything of their own. Because if they did they would surely find this to be as appalling as most folks with morals and ethics. I am a very proud member of the Bank of America family and stories like this just re-inforce my commitment of 23 years to a strong and ethical company.

Posted by Syl Sinohui | Report as abusive
 

Who cares if a bunch of bankers party at a house in Malibu? Were they otherwise going to turn it over to me? I thought not. So why would I care?

Some people just look for things to complain about.

Posted by Jay | Report as abusive
 

Corrected for typos:

The problem is that the rightful owners are now the federal government (i.e. the public), and secondarily the bank shareholders. Neither had use of the property. Bank employees are only hired managers, not owners. Their job is to protect and maximize value of the assets for the owners.

This is disgusting and abusive, and a waste of taxpayer assets. These people should have their salary docked.

Posted by Speak Truth to Power | Report as abusive
 

wow, and we think the US banks have tons of regulations to prevent this kind of actions by their staff. Only goes on to show that the regualtions are for the people at the bottom. VPs and above can do as they please.

Posted by eternal | Report as abusive
 

Nothing wrong with a little unwinding from a tough day at the office.

Posted by alejandro | Report as abusive
 

First, Bank of America has had as many “bad” lenders as any other financial institution. With 23 years under your belt you must surely remember the days of NCNB and the fun y’all had working out of the last real estate crisis. My favorite naive person of late was in house legal counsel who claimed that 1) BofA does not have any real estate problems and 2) how hard they are working with borrowers to extend debt and lower interest payments because of the ML deal. So, I’d think really hard before I bragged on BofA.

That said, Cheronda’s incredulous behavior is another story all together. First to those who “want to party and need an invite”, you must not own shares of stock. The fact that this property was subject to a possible value decrease because of the parties is not in the best interest of the shareholders. Next, compensation is never defined as “partying in the best REO we have”. Cheronda, through her position, had the keys to the house – literally. She abused the trust that the bank thought it had in her. And finally, this may be a violation of the federal banking code. I don’t know, but I hope it is and I hope that Wells can bring criminal charges against her. I understand that Cheronda has large ties to a well known nationally recognized church. That would be an interesting connection to pursue. I wonder if they were at the parties.

 

The LA times has Guyton named as an SVP. She is not. She’s an Asset Manager. This is why I hate liberal papers they always distort the truth.

And to “Speak Truth to Power”, you state this is a waste of taxpayer assets. You surely don’t pay a tax to that property or to Wells Fargo do you?

Posted by Nick | Report as abusive
 

Disgusting. Unethical. Illegal? Instead of jail time for the banker and the bank, they get 25 Billion of taxpayer dollars. To top it off, the owners in foreclosure lost everything due to the Madeoff scandal. This is a MUCH bigger deal than anyone realizes yet.

Posted by John | Report as abusive
 

makes you wonder how many different homes Cheronda Guyton has done this to, great way to spend your weekends and vacation.

Posted by marko | Report as abusive
 

Ever hear of “open house” events to attract buyers to a property?

Any of these high roller guests could potentially buy the house and relieve the bank of its burden. What’s wrong with that? The former owners lost the house and that’s tragic, but at the bank, business is business.

Posted by marshall barrett | Report as abusive
 

The story and comments posted here show how most of Americans do not get what the real problem is. How about the fact that Wells Fargo did not even have the right to take the property in the first place! They sold off the original note when the property was purchased, which in turn pays the mortgage off in full which now belongs to the investor, not the bank guys. Most foreclosures if not all these days are totally illegal. You will not see that in the news. Do the research it’s true.

 

The crime here is not that it reflects the culture at Wells Fargo, rather that a person could not be content with a couple of weekends at a glorious house they would not otherwise be able to enjoy. How does a person get to such a high position and not be capable of considering the risks of having lavish parties ? She should get a life sentence (though I prefer the lower cost version of this) for being so stupid. The only purpose of this news item is to engage further investigation of Wells Fargo’s financial outlook.

Posted by Rolf Winterthur | Report as abusive
 

Wells Fargo media relations: corpcsf@wellsfargo.com

Email them if you have a strong opinion about this usage of the foreclosed home by a bank executive.

I find it gut wrenching and let them know about it.

There are so many conflicts of interest with executives using foreclosed homes it is not anything to joke about. Whether Wells Fargo has my future business or not depends on how well they manage this crisis. And next to the Crisis of last year, I would rank this as the next worst in its history that I am aware off.

Posted by Justin | Report as abusive
 

It amazes me how such people can become VPs. One cant become a VP without the entire network of Wells Fargo supporting that. And I begin to wonder what are the criteria for promotion and if the network at Wells is competent at all

there are so many competent people out there, looking for work and here we have a a complete moron at such a high place at Wells fargo. Truly sad.

Posted by Nate | Report as abusive
 

Sorry Nick, but there’s a profile on Linkedin that indicates Ms. Cheronda Guyton as a Senior Vice President at Wells Fargo (http://www.linkedin.com/pub/cheronda-gu yton/9/4b0/31a). Unless this profile is bogus, or in the highly unlikely event that there are 2 Ms. Guyton’s at Wells Fargo, I’d say that liberal paper, The LA Times, isn’t the distorter…

Any way you slice it, her actions represent an abuse of position and a serious lapse in business ethics.

 

Ultimately, Wells is not to blame for this act; it is on the shoulders of the Sr. Asset Manager (she is not an ‘exec’ as Reuters has claimed) who decided to abuse her powers and take advantage of a situation made possible by the Madoff scheme.

Posted by K | Report as abusive
 

If you look at the pictures of the house, you are looking at someone’s life; the artwork, the family pictures, the children’s names on the walls of the bedroom as well as the toys and the cribs that they slept in. This family was forced out of their home. To think that an executive of the bank that forced them out was having parties there just seems wrong. But it should not surprise anyone. After all, if you are an incorporated business it is okay to rip people off. You will just have a few Better Business Bureau complaints against you. And if someone defaults on their loan, it is okay to hound them and try to recover two to three times the original value of the loan to punish them.

Posted by Jwsg | Report as abusive
 

This short mortgage satire was posted just two weeks prior to this news story. Who would think that something funny like this would come so close to the truth.

Click on this YouTube link:
http://www.youtube.com/watch?v=ZoPUDbqs5 zc

Posted by JimC | Report as abusive
 

duty to mitigate?

Posted by Mikey | Report as abusive
 

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