Parting at Foreclosed Mansions! What Do the Real Owners Say?

It is a shame that all those foreclosed mansions can't be put to better use. Like as temporary schools to relieve overcrowding. Or job centers for the unemployed-there is nothing quite like reporting for outsource training at a 20,000-square-foot Mediterranean manse on the water to boost one's self esteem.



And yet one enterprising Wells Fargo employee seems to have found her own use for a delinquent mansion–as a private party pad.

www.106malibucolony.com The Malibu Colony beach house



According to the Los Angeles Times, Cheronda Guyton, a Wells Fargo senior vice president responsible for foreclosed commercial properties, spent weekends in a $12 million Malibu Colony beach house that was foreclosed by Wells Fargo. The reports say she threw "eye catching" parties, one of which had guests arriving in a yacht.



Citizen groups are up in arms. The Association of Community Organizations for Reform Now said, "This is the ultimate example of dancing on the shattered dreams of the millions of Americans who've lost their homes. They should be ashamed of themselves."



Wells Fargo took over the property in May as part of a private agreement with the prior owner, who lost a fortune to the Bernard Madoff ponzi scheme. Under the terms of the agreement with the owner, the property was withheld from the market for an agreed-upon period of time.



The Times article said Guyton couldn't be reached at her downtown Los Angeles office. The company said in a statement: "We are thoroughly investigating this situation and will take decisive action with respect to any team member who may have violated Wells Fargo's policies. The allegations certainly do not reflect the conduct we expect of our team members. We place the highest value on honesty, trust and integrity to guide our team members in making business decisions each day. We regret the disruption to the neighboring property owners since these allegations were made."



It is tragic, of course, that anyone loses their home. It is even more tragic when bankers (of all people) hold weekend-long parties in homes lost by others. The previous owners must be mortified.



It seems clear that what happened is likely an ethical or moral breach. Still, let's face it–-the bank does own the property now. As long as no damage is done to the property, which it says it can't sell yet, well?



But how should real owners of the property feel? And by that I mean U.S. taxpayers, who are now at least part owners of such banks as Citigroup, Bank of America, Wells Fargo , institutions that are holding a number of foreclosed properties, including mansions. Perhaps the banks should hold regular "taxpayer" pool parties at those mansions they now own? That way, the real new owners would at least get a chance to enjoy them.

http://blogs.wsj.com/wealth/2009/09/14/parting-at-foreclosed-mansions-what-do-the-real-owners-say/

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