Cheronda Guyton, a senior vice president at Wells Fargo, is getting an enormous amount of flack from her ill-advised decision to temporarily move in to and throw parties at a recently repossessed home in Malibu Colony, a really high end subdivision. Apparently some of the parties had her guests being dropped off by yacht (oh brother). The previous owners had put all of their investment eggs in the Bernie Madoff basket and could no longer afford the home.
This is a disaster that Congress will use as proof that banks don’t care about borrowers. My guess is that Wells had a legitimate reason for not listing the property yet (e.g. the prospect of an IRS tax lien on the owners, a restriction in the deed-of-lieu, etc.), but the poor decision making of its Senior VP will make it a mute point. Let’s just hope Congress does not use this as ammunition for passing another law that adds to the deficit or to the long-term cost of mortgage finance, doesn’t work and prolongs the natural recovery of the housing market, which is well underway at least on the lower end of the market.