Not for sale: one repossessed home in Malibu
The article in today's Los Angeles Times about a Wells Fargo executive apparently living it up at a multi-million-dollar beachfront home repossessed from one of Bernie Madoff's victims seems to be fueling resentment on a Howard Beale-scale. My first instinct is to try to defend Cheronda Guyton, the banker in question, because there has to be more to this story than we've heard so far. Times reporters Scott Reckard and David Sarno couldn't reach Guyton, a senior vice president at Wells who leads a team of foreclosed-property managers, or the home's previous owners, and Wells has offered little on the subject.
So let me offer this admittedly lame defense for Wells not accepting offers on the Malibu Colony property or even allowing prospective buyers to visit the home: the housing market is so depressed, it will cost Wells less to hold onto the thing and wait for prices to go up than it would to unload it now at a (relatively speaking) fire-sale price. It's also conceivable that Wells can keep the cost of maintaining the property low by having someone live in the home part-time, picking up the beach litter and tending to the pool. Having the occasional soiree on a yacht moored out back boosts the property's mystique (although having the yacht visible during the day would be better for the curb appeal). And when Wells finally does decide to show the place, it will still have that "lived in" feel that so many buyers crave. I don't know about you, but when I look at a house on the market that's been vacant for a while, it makes me wonder what happened to the previous owners. And if you're trying to sell a $12 million house, do you really want to remind prospective buyers about (shudder) Bernie Madoff?
OK, enough with the sarcasm. Here's what I'm really curious about: there's something about Wells' repossess-and-hold strategy that doesn't add up. Reckard and Sarno's story said the previous owners -- Lawrence and Linda Elins -- refinanced the property with Wells for $3 million in late 2007. If it's a $12 million home, why not sell now and recover the $3 million and a tidy gain? Any real-estate whizzes out there want to hazard a guess as to the strategy here? Assuming there is one, of course.
Photo: The repossessed house is the one in the middle, between the pine tree and the palm. Credit: Kenneth & Gabrielle Adelman / California Coastal Records Project
-- Jon Healey