ACORN was just jealous they couldn't use it for a training facility for underage hookers.

Ah, shadow-inventory shenanigans.

But then, we are talking about Southern California housing. Stability there will be in extremely short supply as the next few years unfold.

CA too big to fail?

The bank wouldn't have the policy that the properties are not to be used for personal use unless this had been a problem previously. Seems like an internal Wells Fargo employee issue to me.

@speedwell, avatar of snark: I would think they would be welcome at the radical beach parties - wealthy bankers tend to be big playas.

Oh, you ACORN folk JUST had to ruin someone else's fun cuz y'all got caught on candid camera!

adding that company policy prohibits personal use of properties held by the bank.

The 3,800 square foot house purchased for $12 million is in one of Los Angeles' most chi-chi neighborhoods, whose residents include movie star Tom Hanks, according to the Times.

From a legal perspective, there is nothing wrong with this. If Wells Fargo were using the property to attract business, or perhaps even buyers, I could see how having swanky parties to attract multi-million dollar property buyers.

That said, it appears based on Wells Fargo's statements, that it was used for personal reasons, if so it's a big steaming pile of fail on the exec's part.

Random question not related to this article - what's with the random tagging? Like this article got beach house, I've seen some others get tags I can't imagine will get used again either.

Actually that doesn't bug me so much as the fact that it's done in article - the other gawker/former gawker sites are more guilty of it, but when I click a link in an article, I expect it to be more info about that subject, whereas a tag would be that site's coverage of that subject.

Maybe this should have been mailed in. Oh well

This is such a awesome idea. How does one become a forclosure banker?

ACORN? ACORN? Oh, that ACORN. Seems like the Wells Fargo exec could have been using the property as a whore house and ACORN would have probably asked for dibs.

@fantomesq:

...unless the bank's insurance policy prohibited use of the property, apart from regular maintenance/showings. Which I bet it does.

You don't want someone wrecking up the joint with a party, or burning it down cooking something on the stove. And you're going to pay more insurance if the insurance company thinks this is a possibility.

@H3ion: Surprised that story hasn't popped up on here yet.

ACORN probably discovered it when they were engaged in some astroturfing.

Sounds like a good growing up movie

@TheOrtega: Yeah, all the downtrodden kids at the summer camp that's going to be displaced to make room for a yacht dock should band together and show these rich bankers what payback really means! Rated G. Copyright 1983, Samuel L. Bronkowitz Productions.

im surprised nobody has brought up sexy parties yet *starts to dance around giggling in a sailor outfit*

ACORN did not get invited.

@Thassodar: I dunno I'm a foreclosure inspector but I inspect places that are worst than mine so perhaps I will pass.

@varro:

Aww did ACORN not get invited?

"Wells Fargo said in a statement it took possession of the Southern California property in May and withheld it from the market for an agreed-upon period of time"

This part is getting glazed over. This is an example of the shadow inventory of homes banks are purposely withholdind from sale to prevent properties from falling to their actual market price. Another example of price manipulation.

Honestly, I don't see the problem with this. Wells Fargo foreclosed on the property and owns the property - so if one of their bankers decides to host parties in it, then they can take it up with their banker. Violation of company policy, sure - but not a violation of the law. They own the property.

@MarcosMaximus: Its no more market manipulation than if you choose to hold your stock until the price bounces back up. Wells Fargo is perfectly allowed to hold properties in their portfolio that they have not released to market... Banks usually do not do so for long because it ties up assets in illiquid forms that are depreciating without proper upkeep but they are certainly free to do so and in this market I would not say that its a bad gamble.

Weekend at Bernice's!

@mannyv: Sorry, Weekend at Cheronda's!

@fantomesq:

This a shady process akin to fraud, because it imparts a premium price in a down market. If someone purchases a foreclosure/ REO with this inventory purposely kept off the market (an estimated 600,000 residential properties, most of them in bubble states) the buyer is buying at a price level indexed higher than it would be if the market was flooded with actual available inventory. It's a rip off of easily thousands of dollars per home purchase.

The lending institutions that allowed the housing market to inflate after 2001 are still playing games to prevent full deflation. In this market, it's a bad move(especially factoring in 10% official unemployment nationally, higher in bubble states) to hold excess inventory, because the faster they let the real bottom hit, the sooner this inventory will move and they can take the losses they earned via irresponsible lending and get back to moving product and writing quality loans on accurately valued properties.

I'm pretty sure as a banker I have to attempt to sell 1 new checking account and I can call the use of the house business use, which if is not disallowed. I guess they need to check her reimbursement receipts also and the IRS should check for tax write offs to know for sure.

No wonder that fat viagra using drug addict Limbaugh was ranting about Acorn this week. They spoiled his fun.

@eddieck:

The former owner will still owe the difference between what their mortgage was and what the home sold for after foreclosure. So, if the bank trashes the place having parties and this results in selling it for much less than they could have or should have it, the former owners will end up on the hook for more money.

@fantomesq: No, I think that's a pretty standard policy. They may start keeping an eye out and enforcing it more strictly, but I think the policy was in place already because, well, that's just common sense. Like how cops can't take dope from the evidence room and do lines on their desks. Or something.

@coren: Because it's fun? I don't know. A lot of articles recently have had bizarre tags. For example, the article about the guy crashing his car into a sex shop to steal a toy had the tag "What would you do for a Klondike bar." I like a few fun tags thrown in there, because this site is more about entertainment than news for me. *Shrug*

These banks really have no sense of right and wrong only legal and illegal.

Listen...maybe it's legal to rape the hell out of America but that doesn't make it right.

Not only do banking executives make ungodly amounts of money for the work they actually do, but now they get to party at places which they *didn't* buy, places in which most of us could only dream about.

How do I sign up? Seems like Mark Knopfler was singing about bankers when he said, "Money for nothing and your chicks for free."

@Al Swearengen: California is a non-recourse state. Former owner is done.

@humphrmi: But if the former owner still owes money and Wells trashes the place, then they are selling it for even less than its worth.

@coren: as the internet would say, "for teh lulz"

@ARP:
What Consumerist didn't mention is that the previous owners were Madoff victims and turned the house over the W-F to pay off debts from their loss. There was no mortgage on the house.

@Vandelay Import Export: Probably. Next thing you know those idiots being led around by the nose at TEA Parties and such by Freedomworks will be astroturfing them too if WF don't pay up.

@MarcosMaximus:
BS. I have properties in FL that I intend to sell, just not in this market. Am I artificially inflating the value of homes there currently on the market?

The LA Times has run two stories on this property. In the most recent one [www.latimes.com] there was this line:
"According to Coldwell Banker, the 3,800-square-foot home with direct access to the beach has been listed as a vacation rental since April at a rate of $60,000 a month."
So it's not exactly like W-F is sitting on the house and not trying to get any value on return. And this was not a foreclosure. The previous owners were Madoff victims and turned the house over to W-F to pay an outstanding debt.

@Al Swearengen:
It wasn't a foreclosure. The previous owners were Madoff victims and turned the house over to W-F to settle an outstanding debt. From the LA Times article
"the couple signed over the property to Wells Fargo to help satisfy a larger debt, she said."

@nstonep: Actually, they're just hasenting their doom. Standard unemployment is what? Just shy of 10%? In some areas it's above that. Not only that, but "real" (since the numbers game began years ago, "real" unemployment numbers are not published because that would cause doubts about the viability of Capitalism to small minds) number can be two to three times that in some areas.

Just wait, if "Obama Fails" like the GOP really wants (I don't buy that because they're in the noose here too, just panderin' to the base) then you'll see banks and ownership records come to the fore and plenty of people that might just run. Mobs tend to destroy things, and that includes banks. You get enough people into a mind where they can't feed their kids, you'll see blood. Everyone forgets that, nowadays, pretty much any Western country is 2 weeks from a revolution.

At that point the "rich" had better hide, because they'll be a target and the police probably won't care.

That's what happens if Obama "fails." Since a good portion of the GOP "leadership" is "rich", old, and white, that would be a suicide pact. So they hem and haw with a "rich" white guy that runs "Freedomwerks" giving out half-a$$ info to inflame the illiterati of their side, toss out ambiguous statements about an abortion doctor killed in church to whip up religious fundies, and support the quasi-nutters in their party by quasi-agreeing that "Chairman" Obama is a seekrit muslin agent sent to destroy their Americas.

All of this by morons that don't even know that Socialism, Fascism, and Communism are all divergent ways of governance (if you can really call a fascist dictatorship a form of governance). I wouldn't mind it so much, but it's beginning to get to the point where the stupid is irritating me. So I'm pretty much to the point of hoping that, on days like 9/12 rallies, that a giant thunderbolt comes from the sky and kills the concentration of stupidity before we get to the point in this country where we have to start fearing a singularity of stupidity forming.

@Lucky225: Funny thing... They went to at least 3 or 4 other offices and were told to fuck off before they found a couple of idiots who would go along with their crap. And the idiots got FIRED!! Funny how the filmmakers forgot to mention that.

@eddieck: Wells Fargo owns the property, and Wells Fargo's policy was to not do shit like this. You can bet the VP's contract specified not violating W-F's policy.

@Sudonum: Did not see that. In that case, its their house and they can do what they want with it. The only issue they face is that it makes them look like D-bags from a PR perpsective and it violated their internal policy.

Wait wait people; you can't hold Executives to the same rules as the rest of society. These are our superiors - they are royalty. They should be allowed to do whatever they want and run over anyone and anything in the process.

... or is that only how the company I work for operates?

@Inglix_the_Mad:

Nice personal attacks. Glad I am a idiot, would you like to call me anything else? Just because individuals disagree with your belief or opinion we are idiots? Stay classy.

For your reference: [www.constitution.org]

@sinfonian94: Ssshhhhh! We can't, y'know...have FACTS and stuff like that ruining the anti-Obama meme.

@Vandelay Import Export: ACORN probably discovered it when they were engaged in some astroturfing.

Astroturfing. I do not think that term means what you think it means.

I think the SVP will be in very big trouble for this boneheaded move.

Why exactly is this any business of ACORN? If Wells Fargo has the REO, then it is an internal matter.