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Not for sale: one repossessed home in Malibu

Cheronda Guyton, Wells Fargo, Malibu, foreclosure, Bernie Madoff 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

 

Comments () | Archives (22)

The comments to this entry are closed.

bono

The house was deeded to the bank to satisfy other debts to the bank above and beyond the mortgage on the house. The bank had an agreement with previous owners not to market immediately. Legal and business reasons/decisions can often delay the ultimate disposition of assets in complex financial settlements - the previous owner could even have some type of redemption period to buy back the asset. Without knowing all details, and you never will due to privacy laws, assumptions and conjectures of this magnitude are a FAR cry from true journalism.

Jon Healey

@Bono -- Fair enough, but none of your comments explain why the exec and her family have been spending weekends in the house. And entertaining there. That's why people care about this story. If it were simply a matter of a bank not putting a repossessed home on the market, it wouldn't make the paper, let alone hit A1.

BTW -- What's the home video strategy for U2 3D? And why are you commenting on Malibu controversies? I thought that was the Edge's turf.

Bruce Megowan

The house may have been collateral for another loan the couple had with Wells Fargo.

Stanley Richardson

Want to bet she is not the only banker nationwide taking advantage of repossessed property in a bank's inventory? She just happened to get caught.

I believe it is just another example of the attitude these people have. They do this kind of thing because they can, and utterly without regard for the consequences, because there won't be any. They have gotten away with this type of behavior for so long it is now a part of the lifestyle of the rich and shameless banking set, just like million dollar bonuses.

lwps

How does a house go from $3 million to $12 million in 18 months, during the worst real estate market of all time, one that is hitting the high end especially hard right now?

herenthere33

Wells claims this is against their "policy" to party at foreclosed properties but it will take an outside investigator to find out the true facts. For example, who owned the yacht that occasionally pulled up loaded with revelers? A Wells exec? And just how many other Wells execs visited, used. or were aware of the parties at the house? If the bank is serious about ethics violations---and it's doubtful that it is---someone external ought to be looking into this and the lazy Board should get involved. Surely someone noted the yacht's name and can add to this story.

guest

There's more to this story than meets the eye... From propertyshark.com the address of the property is:

23360 Malibu Colony Rd NOT 106 Malibu Colony RD.

The records show the following:

5/13/2009 Deed
Sale price $12,000,000
Buyer/Grantor Collin Equities Inc
333 Market St
San Francisco CA 94105
Seller/Grantee Elins Family Trust

You can also see it at Zillow.com

http://www.zillow.com/homedetails/23360-Malibu-Colony-Rd-Malibu-CA-90265/20552578_zpid/

The property is valued at about $4M according to property shark. Why would Wells Fargo buy this property for 3 times the market price?

kbk

Lets be real...bottom line is they just don't get it. live it up wells , your time will come as well. What goes around, comes around.

Reminds me of when the GM exec showed up asking for a loan using the company's private jet.

Some executives are not very smart, just lucky

elleneyegreen

Doesn't matter what happened with the loan/foreclosure. What DOES matter are these corporate swine continuing to live off the pork of other peoples' misery-fraudulently and illegally. Wells Fargo "vows" to take "decisive" action. We've already seen their decisive action with this flagrant and arrogant display of abuse. Guyton should not only be fired - immediately - with NO bonuses, no pension, and prosecuted for not only trespassing, but fined her entire salary since May, when she and her family began occupying a house she took over as if it were hers, yet to which she had no right.
Notice the silent sow now, who won't answer e-mails or her phone. Bacon, anyone?

Belinda Gomez

Why is the LAT editorial board member's first impulse to defend the shenanigans of the Wells Fargo exec? Is it because she's African-American? I'll bet that if some Anglo male pulled this same stunt that the LAT would be denouncing corporate privilege left, right and sideways.

Guyton worked for Gray Davis, which tells me everything I need to know about the content of her character.

(And how do I know she's African-American? Because I can do research on the internet.)

Nara

So Cheronda Guyton,a well paid exec,who lives in Beverly Hills at 130 N Gardner St,Los Angeles,90036 in a $900,000
home with her husband Andrew Guyton has definitely exibhited a quirk in human behaviour.

Why does this Wells Fargo Exec's home carry a Downey Savings(now US Bank) mortgage?

madonna

Property is now listed (as of last night) for $21.5 million with Chad Rogers who, to the best of my knowledge, has never sold a beachfront home in Malibu Colony and who's father reportedly has ties to Wells Fargo Bank. Last minute listing as there is very little detail in the setup sheet. Why not one of the local Malibu Colony agents mentioned in the article or Marcus Beck, Tracy Testin, etc. etc. who presented offers to the bank. Curious...

Anonymous

I agree with the latter comments why not sell and recover SOMETHING from your Madoff troubles instead of giving it back to the bank? It doesn't make sense. However the Bank is in possession of it now and it is absolutely no one's business what they do with it as long as it's not illegal. My goodness people are acting as if she's been staying there for years! Ms. Guyton is not the bad guy here get the facts first. Like why does the Realtor who brought the story to the surface have a link to her website with extensive photos of the interior of the property in question, when the property was/is not listed for sale? Hmm, sounds like a conspiracy.

Jon Healey

@Belinda -- The exec's race makes no difference to me; why does it matter to you? My impulse to try to defend her came out simply because no one else was, but as I tried to point out in the piece, I had to go to some pretty absurd lengths to do so.

@Nara and @Madonna -- thanks for the research! Interesting points. And Madonna, it's interesting to see that you and Bono have different takes on this. Maybe that's because you own property in the area and he doesn't. At least I think you do -- whatever happened to that house you painted in stripes, Tuscan-style?

Jenocean

Wells Fargo took bailout money. Don't they have an obligation to sell this home and pay us taxpayers back?

tarheelchief

It's simple,charge the Bank of America official the comparative amount in compensation on her 1040 Form. It's worth about $7000 a month salary.The accountants can figure this out,just like they can figure out how much a car perk costs.
People pay income taxes on company cars,they can certainly pay income taxes on property they use while they're working.
Then the county should get full assessed value in property taxes.This is not a loss for the bank,it is being used as a residence and should be subject to the same property tax rates,if it were marketed.
If the other bank creditors are upset,let them sell the property.

Douglas Matsu

If the house was worth the estimated $12 Million dollars and was original bank loan was $3 million dollars, no matter what price the bank sold it at, they would have made a profit. But to prevent Real Estate Brokers from showing the property to prospective buyers while Ms. Guyton enjoyed the benefits of the home (which was for lease at $60,000 per month)is the real rub. Even though she would use the excuse that she was keeping the house in "Living Condition".

If a person would calculate how much interest on the loan plus the the cost of property tax especially in Malibu was costing Wells Fargo per day, she was getting a pretty nice size benefit.

chris

so some black folks are living for free in a home surrounded by white people who paid pver 10 million for theirs. the bank owns it... they can do as they please. no one is taking advantage of anyone.. the people who want to "buy" it from the bank are offering 70 cents on the dollar...

the bank should hold on to it and do as they wish. no one wants a foreclosure sign next door to them. but some would rather a foreclosure sign instead of black neighbors.

how does a site value this home at 4 million? the one at the end of the road just sold to jason statham at about 11 or so million..

the community has each house numbered.. but they also have postal addresses. 106 is just the community number...

Belinda Gomez

"My impulse to try to defend her came out simply because no one else was, but as I tried to point out in the piece, I had to go to some pretty absurd lengths to do so. "

Then why bother? Waste of pixels and time.

Lydia

I think that a few folks are whacked in their comments. Did I miss Jon making some racial slurs anywhere in this article? Nope - don't believe I did. Rather, I find it also interesting that WF exec's are enjoying a few extra perks at the expense and actually liabilities of not only their shareholders, but also all of their company.

GA is the only non-judicial foreclosure state in the country, but it seems awfully 'odd' that someone in the LA County Courts hasn't questioned this huge variance between FMV & Claimed Value & Sale Price -- lots of mortgage fraud?

Madonna - who gives a 'flip' who got the blasted listing? As a former realtor here in GA - the market is tight as a tick right now and any lead is one to be grabbed!

ay

If the loan was only for $3 million, the $12 million house wouldn't have been repossessed. The borrower would have sold it and kept the difference. The debt is clearly more than $12 million. And even if the bank is free to sell the house, it might not want to do so in a depressed market. It might be more economically feasible to just hold onto the property and lease it as a weekend/summer home for a few years until the market recovers.

2LOLO

WELL WHAT CAN WE DO ??? WHEN A MAN AND HIS FAMILY LIVING ON THE BACKS OF MILLIONS OF AMERICANS WHO LOST THEIR HOMES AND MONEY ?? SEND THEM TO JAIL AND TAKE BACK THE MONEY AND WHAT?


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