Wells Fargo’s Exec Forecloses on $12 Million Malibu Beach House – Then Moves in for Summer Fun. And why not?

It’s all over the news… Wells Fargo’s Senior Foreclosure Justification Officer tossed out the owners of a $12 million Malibu Beach House, raped by Bernie Madoff, and decided… what the heck… might as well move in for some summer fun.

The funny thing is… it seems that many people are actually upset about this.  Outraged, even.  As in: “My goodness Martha… this is outrageous!”

In response, Wells Fargo immediately jumped into its best “we’re outraged too,” posture, vowing to investigate immediately and get to the bottom of the situation.  Like, I’m sure heads will roll.  Wells Fargo is tough on crime, don’t you know.  I have three things to say about this whole thing:

First of all… I’m sure the house-sitting Wells executive that hosted parties throughout the summer never invited anyone from Wells Fargo… or B of A… or Chase, IndyMac, etcetera, etcetera, etcetera.  I’m sure most of the exec’s friends are from outside the banking industry.  So, it’s likely that other bankers had no idea what was happening.

Second of all… I’m confident that this is an isolated incident.  Probably the only time this sort of thing has ever happened.  Those that think otherwise are just being cynical and unfair.

And third… I wonder if the Wells Fargo spokesperson that promised that the bank did not condone such behavior was calling from a recently repossessed late model Range Rover.

A few weeks ago, the Obama administration released its “report cards” showing that the banks and mortgage servicers that agreed to participate in the Making Home Affordable program, hadn’t.  Wells Fargo received the lowest grade of all… 4%.  Four percent of the Wells Fargo mortgages that might have been modified and therefore saved from foreclosure, were modified.  And that includes the old “trial period trick,” in which some homeowners are permitted to make three more payments before the bank forecloses anyway.  Four percent.  Wells Fargo… four percent.  Very well done indeed.

Were people outraged at that unbelievable underperformance?  Yes, some were.  In fact, I seem to remember how the mainstream media reported it… collectively they said: “Yawn.”  Then they went back to debating a health care bill that doesn’t yet exist, asking questions about whether Obama will be able to give health insurance to everyone in America without increasing the deficit by even a dime, as the president put it during one or more of his Presidential Pitches.

Apparently, Obama’s health care for everyone plan is going to work a lot like loan modifications… it’s going to be free.  And so why shouldn’t it be free?  Don’t question him about it either, because he’s made damn sure that Republicans understand that he’s not going to tolerate partisan dissent.

Okay, fair enough.  I’m for all of it then.  Free stuff all around!

So, with that in mind… let’s not get all worked up over a Wells executive moving into a foreclosed $12 million beach house she had taken off the market for the summer.  I say Wells executives should be allowed to start looking at the hundreds of thousands and soon to be millions of foreclosed homes as their personal time share network.  Cars too.  Airplanes… why not?  And if they only want to offer 4% of their HAMP qualified distressed homeowners loan modifications… just shut up about it, would you.  We should all be damn grateful that the number wasn’t three percent.

Look… the banks are obviously in charge and the administration is powerless… or at least spineless… to make them do anything.  As an example, I recently learned that IndyMac bank, now One West I think… CHOSE not to participate in the President’s HAMP program.  They CHOSE not to?  They were given a CHOICE?  Seriously?

It’s been some time and my memory has been known to play tricks on me lately… like I can’t for the life of me remember why I voted for Obama… but IndyMac… hmmm… give me a minute… trying to place it… oh yeah… didn’t they used to be… what’s the word… that’s right… BANKRUPT and seized by the FDIC.  And didn’t we… the taxpayers… just take an $11 billion hit as a result.  Am I off by a billion?

And yet they were given a CHOICE as to whether they’d wanted to participate in HAMP?  Of course they were.  Here’s a letter I received yesterday from a reader:

Dear Mandelman…

My Aunt Jane has a home loan with Indymac Bank/One West.  It is a high interest rate loan with a minimum payment due of $2900 per month.

Her husband passed away in March, leaving her with only $1465 social security income per month, and we have been trying to get Indymac Bank to consider her for a loan modification since March of this year.  They have lost the package and continue to stall because she is keeping the payments current.  She has exhausted all of her savings in doing so.

Indymac has said her request is “in review.”   It has been “in review” since April, and no one can tell us when (or if) they will get to it.  I finally was able to get Sharon Gardner at One West Bank to tell me that “it helps for the customer to be delinquent.”

It is a travesty that these banks take bail out money from folks like my aunt, and then will not even return calls when she is attempting to work out a payment she can afford.  She does not want to lose the family home, which she has owned for over 30 years.  Indymac/One West is forcing her to ruin her credit, and then there is still no assurance they will look at modifying her loan.

If anyone needs to be helped in times like these, it is an 80 year-old lady on social security who just lost her husband.

Your voice is strong and is respected.  Can you help us?

Well… I’m sure going to try, but we have to be realistic here.  If the home is nice and in a good location, there may be an Indymac executive that’s interested in using your aunt’s home… and after all… bank executives do come first.

As it should be.


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