The Los Angeles Times first reported earlier this month that a Wells Fargo senior vice president, Cheronda Guyton, responsible for foreclosed commercial properties, allegedly spent weekends enjoying a $12 million dollar home in Malibu Colony with her family. The home was transferred to Wells Fargo through foreclosure in May, by the previous owners who are said to have suffered extreme financial losses in the Madoff's Ponzi scheme and were therefore unable to maintain their home. The home was kept off the market through an agreement the previous homeowners had with Wells Fargo, but during the summer months, The Los Angeles Times cited several eyewitness reports from various residents of the Malibu Colony gated community, that include parties with guests arriving in yachts. Malibu Colony has long been known as a playground for celebrities.
Wells Fargo issued a statement regarding the rules of conduct for it's employees, in which employees are prohibited from personal use of the properties held by Wells Fargo. They also stated that they regretted "the disruption to the neighboring property owners since these allegations were made."
According to Coldwell Banker, this beach front home is 3,800 square feet, and has been listed as a vacation rental since April at a rate of $60,000 a month. The mayor of Malibu, Andy Stern, who is also a real estate agent, told Reutors that the property could lease for as much as $150,000 a month.
An advocacy group for low-income tenants, California Reinvestment Coalition, says that Wells Fargo (and other banks) often evict renters from foreclosed properties quickly in order to speed their ability to resell the property. The advocacy group is working with lenders including Wells Fargo to try and defer the selling of foreclosed homes that are currently occupied by renters in order to give the renders more time to find a new place to live. Kevin Stein, the associate director for the California Reinvestment Coalition, said the bank executive's use of the Malibu property just made Wells Fargo look that much worse for evicting renters out of foreclosed properties so quickly so the bank can put the homes back on the market.
On September 14th, Wells Fargo confirmed that it had fired the seventeen-year veteran of the bank- Cheronda Guyton, for partying in the foreclosed Malibu beach house.
A statement by Wells Fargo was reported in an article on BusinessWeek, “Our investigation concluded a single team member was responsible for violating our company policies. As a result, employment of this individual has been terminated. We deeply regret the activities that have taken place as they do not reflect the conduct we expect of our team members.”
Image from BusinessWeek.com article: http://www.businessweek.com/the_thread/hotproperty/archives/106MalibuColony09.jpg