Recession nightmare: When bankers move in...to your foreclosure
Filed under: Banks, Home, Ripoffs and Scams, Fraud, Relationships, Bankruptcy
It's hard to imagine a pleasant foreclosure. Like root canals or appendicitis, they don't really come with a silver lining; after all, it's hard to find a way to put a smiley face on being turned out of one's home. However, while there are few things that can make a foreclosure enjoyable, there are many factors that can make it considerably worse. Perhaps the worst of these is the notion that the bank, an entity that is ethically charged with making the foreclosure process as impersonal as possible, would allow its employees to reap a personal benefit from a customer's pain.For Lawrence and Linda Elins, their forced relocation from their Malibu beach house was traumatic, as it came on the heels of a massive financial crisis. The Elins, who had invested much of their money with Bernard Madoff, were devastated by the December 2008 revelation that he was a fraud. In the ensuing months, they attempted to piece together the broken parts of their financial life, finally deciding in May 2009 to surrender the house that they had owned for 13 years.
In 2007, the Elins had refinanced their home with Wells Fargo for $7 million, but at the time of their foreclosure, it was valued at $12 million. However, after they left the house, the bank refused to show it to prospective buyers, repeatedly turning away the requests of area realtors. Instead, the company's senior vice president for foreclosures, Cheronda Guyton, moved her family into the home, using it as a weekend getaway.
Over the next few months, Guyton received a residential parking permit from the security firm that guarded the neighborhood, and neighbors reported seeing her Volvo SUV often parked outside the house. Her regular use of the home culminated in a late August party, in which some of the visitors arrived from a yacht anchored just offshore.
Confronted with the story, Wells Fargo admitted that it is not company policy to allow its employees to use foreclosed properties for their personal use. It has promised to investigate the allegations against Guyton; however, in many ways, it may already be too late for the company to repair its reputation. When economic disaster happens, it's hard to avoid taking it personally, and as the Guyton affair demonstrates, sometimes foreclosure may be personal.
Reader Comments (Page 1 of 1)
9-12-2009 @ 7:25AM
Deborah Rhoades said...
I don't find this hard to believe at all. I have nothing but sympathy for the poor family. My husband and I live in Australia we had to go to the banking ombudsman in Australia to help us as we had cross collatorised three properties with the NAB and they would not allow us to sell any to reduce our debt. In this current economic climate that was a disaster financially for us. They wanted us to sell all three ( the family home). We have been lucky we have fought them for a year and lost 25 years of wealth but we keep our home.
Regards
Deborah
Reply
9-12-2009 @ 10:58PM
Alvin said...
If you let the bank take your house, you lose the right to sell it yourself. They should have sold it instead of just letting the bank keep it.
The bank's board of directors might be pissed, because that's hurting their bottom line, but the former home owner should have learned the lesson of "don't trust other people to look after your finances" when Madoff walked away with their fortune.
It's rude, it's cold, it hurts. Capitalism sucks when you're losing.
Reply
9-13-2009 @ 8:48PM
Laurel said...
Only after said Property was foreclosed did the Bank take both personal and actual posession. I'd doubt the former owners just "let the bank" have their home and I didn't read in the article they wanted to be able to sell it after foreclosure. HOWEVER, the Bank had the duty to list this property for sale. The Bank must hold themselves to a higher standard if they expect people to trust them with their money. This is blatant and Ms. Guyton should/must/had to know this was a direct violation of her fiduciary duty to the Bank. She should be evicted, fined and forced to resign her position. Perhaps only then would she understand she used faulty judgement.
Reply
9-14-2009 @ 3:05PM
Nate said...
So they had an "agreement" to not sell the house for a limited time with the previous owner?
wtf is that about
why cant the bank come clean about the agreement and the reason for it being there
Reply
9-17-2009 @ 11:03PM
Meg said...
There seems to be common theme running through the shortsale/forclosure operations of all the Banks. They are making it impossible for potential buyers to buy homes before they go to foreclosure.People wait over six months just to get an answer on an offer to buy. What possible benefit this can be to a bank is unclear unless the bank itself or its employees are gaining more from foreclosure than from selling in a timely manner.We had an agreement to buy a short sale house and on the eve of closing the bank raised the price. Rather like bait and switch. Shareholders and people who bank with Wells Fargo should be loud in complaints to a local manager.
Reply
9-27-2009 @ 10:15AM
Carlos Sanchez said...
It is incredible how Wells Fargo Bank keep going committing Mortgage Fraud and taking away homes from families and getting away with it.
Wells Fargo Bank head employees should be investigated, inducted and jailed according to their crimes. Not mentioning to suspend their Licenses from the Dept of Real Esate.
This is the bank that we helped with $45 Billion bail out from tax payers. The least that WFB can do for home owners in financial distress is help to save our homes.
But it is more profitable for WFB to foreclose on a home than to comply with Obama's Law "Home Affordable Program" signed on May 20, 2009.
We need to change the system "Report Mortgage Fraud"
Please see my related blogs at http://www.changingtheflow.blogspot.com/
Reply
9-27-2009 @ 10:45PM
Mary Finn said...
The proper term is "conversion" when an employee uses company property for his own benefit. Unless he can legitimately prove a business use for the home, such as the party being used to showcase the house to prospective buyers, I think criminal charges are in order.
Additionally, I have heard that in this mortgage mess, some banks don't even have clear title when they take control. Debtors have been able to stay in their homes merely by damanding that the bank produce the note, a wise precaution to keep another party from demanding payment as well.
Reply
10-02-2009 @ 9:58AM
Barbara Ann Jackson said...
OPEN LETTER TO PRESIDENT OBAMA (on Foreclosure Crisis)
Mr. President:
PLEASE launch probes into self-evident false IRS form 1099-A's connected with foreclosures.
A mere look at Wells Fargo's false 1099-A's will expose various White Collar real estate & foreclosure fraud (carried out for years)--likely, another S&L mess! Further, the recent controversy about former Wells Fargo (WF) senior vice president, Cheronda Guyton’s use of the Malibu home which the owners lost due to Bernie Madoff, is unwitting exposition of deceits associated with foreclosure and repossessions. Moreover, Wells Fargo’s internal investigation into the Malibu matter has glaring appearances of coverup –particularly because WF implausibly announced Ms. Guyton acted solely when it fired only her.
Specifically, non-legal foreclosures filed DELIBERATELY in courtrooms are for reasons such as: filing false Internal Revenue form 1099-A's for tax advantages; repeated property flipping (which leads to blighted neighborhoods); and Bankruptcy Court false motions to "Lift Stay" for purposes of achieving SIMULATED AUCTIONS. As such, loan modification is not in the interest of these sort of lenders. Ongoing news of courts dismissing foreclosure cases because of no proof of standing is not always a coincidence, or mistake.
Deliberately false foreclosures often name defunct mortgage companies or companies which no longer hold the notes, and contain fees in excess of "Acceleration Clauses," which makes it even harder for people to re-pay arrears. If property owners sue for "Unfair Debt Collection Practices," attorneys make more even $$$ through protracted litigations --which Wall Street Investors often incur the tab. In some instances, through use of a false mortgage holder’s name, the debt collection lawyer actually is the disguised foreclosing plaintiff who wounds up with ownership of foreclosed property and flips it!
The reality is that SCORES of foreclosure cases -including some of Wells Fargo’s have been dismissed because collection lawyers file foreclosure or Bankruptcy court proceedings without proof of being the proper party in interest. Accordingly, as it pertains to the minuscule information supplied by WF after its former vice president squatted and partied in the Malibu home; and in light of foreclosure frauds, here are some blatant questions about that home squatting incident, and about foreclosure that ought to be answered:
1. Because the Elin property had not yet been put on the market for public sale, how or why did ––according Ms. Guyton– Collin Equities wind up owning the Malibu home after the Elins signed it over to Wells Fargo?
2. Was Collin Equities (in like manner as Wells Fargo operates here in Louisiana) a straw buyer for the Elins property, or did some sort of “simulated sale” occur whereby the property deed was (unlawfully) conveyed to Collin?
3. Considering Guyton’s use of that Malibu home, and her reference to Collin Equities, was there kickbacks / quid pro quo activity between them or any other firm of which Guyton oversaw property ownership transfers?
4. Since Ms. Guyton was “responsible for commercial foreclosed properties,” wouldn’t it be the role of the person who is in charge of Residential foreclosed properties to permit Guyton to have access to the. . .
**This ENTIRE letter is also posted at:
http://www.pr-inside.com/open-letter-to-president-obama-on-foreclosure-crisis-r1505916.htm
Reply
10-06-2009 @ 6:59AM
philip s cerisier said...
IT'S EASY TO STOP 90% FORECLOSURE.
WHEN THE FED TAKE IS RESPONSIBILITY ENFORCE A GOOD REGULATION SYSTEM . STOP ALL BIG BANK BERNARD MADOFF
SYSTEM,ALLOWED THE RIGHT BEFORE A FEDERAL JUDGE TO LISTEN TO THE POOR MINORITY ABUSED.
SPECIALY ME AND SOME OTHERS.VICTIMS RIPOFF ABUSED.
BY CHASE BANK CASE REMIND UNSOLVED.BECAUSE JUSTICE ONLY WORK IN FAVOR OF THE RICH.
Reply
10-06-2009 @ 6:57AM
philip s cerisier said...
FOR ALVIN CAN YOU TELL .HOW YOU CAN SELL A HOUSE 200.000 DOLLARS VALUE WITH DEBT OF 451.000 DOLLARS LOAN .WITH A TRICK CLOSING FOR THE PASS TWO YEARS WITHOUT A CLOSING STATEMENT.
Reply
10-13-2009 @ 7:43PM
Susan said...
I can feel the pain of the homeowners -We started in Nov. 2008 attempting to work with Wells Fargo on a loan modifaction on our home loan - but talk about hard to work with - it was a nightmare trying to work with these people - well needless to say they just could not find a way to work with us - one excuse after another - By March of 2009 we gave up waiting on Wells Fargo - we filed bankruptcy and let our vehicles go in order to be able to keep our home - and we let Wells Fargo know everything that was going on- In Aug 2009 we were late with our payment - about 15 days late, and also let Wells Fargo know - but what do you think happened - Sept. 2009 we got a letter from a law firm representing Wells Fargo - they were starting foreclosure on our property - Wells Fargo is out for Wells Fargo - customers are no more than a number to them - I would advise anyone - Never - Never use Wells Fargo - the only way a company like this will stop - is when the people stand up to them and STOP - enabling them by simply not using them -
Reply