John Stumpt, CEO                                                                                          10/29/08

Wells Fargo

420 Montgomery St.

San Francisco, Ca  94104

Dear CEO John Stumpf,

The following rough, chronological outline is a synopsis of the details of my dynamic, negative experience with your bank (a more thorough letter is available upon request).   I am writing to you in hopes that you can somehow rectify any mistakes that might have been made by your officers in the processing of my loan.  Fundamentally, I am extremely dissatisfied with the service I received, and I don’t feel that your area officers can offer me any objective consideration.

*          Applied for loan on stated income in April of 2007 for a jumbo land/construction residential home project appraised at $***,000. in June of ‘07.  The land cost $***,000. and the construction loan was for $***,000.   I was the owner/builder/general for the construction.

*          Planned to build an adobe house made from bricks made on property, which was definitely a custom project.  (Photos of this home are enclosed).  In fact the home is a de-facto LEED building with building materials made with local ingredients on property, much of the wood gathered and milled as reclaimed from local sources, recycled paper and blue jean insulation, no VOC paints, renewable bamboo cabinetry throughout, an underground AC/heating system mimicking geothermal, and by virtue of the adobe, the thermal mass creates incredible energy efficiency.  This is the kind of house that would be profiled in the San Francisco Chronicle as a positive direction in home building with the added benefit of both a classy and classic look.  Basically, this is a showcase house.  And we accomplished it at roughly $112./sq. ft., which is what our budget could allow. 

*          I asked both Jennifer Mild and the Construction Loan Dept. of St. George, Utah about the possibility of running over the twelve month construction period because of the special nature of the project and my local planning commission’s meeting coming 2 full month’s after closing.  The replies were resounding, “No problem.  It will simply be run over by a 3 month increment at a cost of $1,700.,” they said.  Strictly a formality only.  (This was not a true statement)!

*          Closed on this loan on 6/14/07.  Hired architect and an engineer to begin project formally.

*          Could not begin construction until local planning commission meeting approval on 8/13/07.  Approved at that meeting.

*          Began in earnest to find sub-contractors at a reasonable price.  Pad was completed in early October and underground AC, plumbing, electrical and footings were finished by early Dec.

*          Meanwhile during the Autumn the bricks makers had finished making the 12,000 bricks required to build this 2,000 square foot home, and we built a 200 ft. shed out of adobe in Nov. in order to let me experience the process.

*          In Jan. ’08 the slab was poured and following a particularly cold spell wall construction began (adobe grout doesn’t set well in freezing temperatures so that December and January are bad months for building.  This is one of the primary reasons I asked about the 12 month construction phase at the beginning, noted above).

*          Walls were completed and upper structure stick framing began in April. 

*          In April ‘08 I informed the Construction Loan Dept. that I would need the 3 month extension in order to complete the home.  I was told that there would be no problem.  Importantly, I was not informed of any problem with the project or its progress at this time, either in person or in writing, but in fact the bank never informed me that in April of 2008 the permanent loan "product" that I had signed up for was no longer available!

*          Framing complete in late June when surface finish of the exterior upper walls began.  Also roof complete by early July.

*          My $22,000. draw for various subs in late June was not forthcoming, and I was told that it was being worked out.  At no time was I told that the money would not be coming.  However, in late July, I was told in no-uncertain-terms that I would not be receiving my last $43,000. of my construction loan.  The reasons given were not well described or discussed, and nothing was presented to me in writing.  (Eventually I came to the conclusion that I was caught in your bank’s preoccupation with the credit and liquidity crisis as if I was to blame for the debacle). 

*          We worked out an end date of Sept. 26, 2008 for the completion of construction at the above meeting as well as the date to turn the loan to the permanent one.  From this late July date to Sept. 25 no mention of anything was asked of or told to me other than a couple of calls asking about progress.  Importantly, no mention was made that there was any problem with a smooth switch from construction to permanent.

*          I began to look around for some money to finish the project including taking out many goods with 12 month Home Depot and Lowes purchasing.  I also went into debt with some sub-contractors including the roofer, who placed a lien on the home because of the last draws being denied.  I also went into savings.

*          On Sept 23 I informed my bankers that I received the C.O. (cert. of occupancy) three days ahead of schedule.

*          The next day, Sept. 24 Tom Rutter informed me that I would have to come up with $29.000. more + closing costs + $13,300. for the aforementioned lien in order to get the permanent loan in place.  He explained a lot of mumbo-jumbo that is beyond me, but needless to say, I was shocked.  I felt like WF was trying to take my home from me!

*          I had my lawyer call on Sept. 25 and was informed that Tom Rutter was willing to drop the 29K to 21K,  still, not much of a consolation.  And it left me wondering how could he so arbitrarily change from 29 to 21 in a matter of two minutes?  On top of the insult of not having my last draws and the subsequent indebtedness to subs, I now had the injury of somehow finding $21,000. more.  From where?

*          In my subsequent discussions with Tom he inferred that it was like a buy-down of the loan in order to make it work for his bank.  However he later informed me that it was in fact points, *.** to be exact.  I had to take on personal loans and go further into debt in order to come up with the $40K for closing and points.

*          At the title company at closing, I was also informed that my original 30 year fixed, as promised to me, was now a five year, then floating.  No one informed me of this change; I had to find it out from the title officer!  By the wa,y he thought that my closing was very fishy, and he had never seen anything like it!

*          Of course I could have looked for another loan at some point during these latter days, but in this market who would take my mortgage on such short notice?  It felt like Monopoly to me, and I had landed in a Four Seasons on Park Avenue!

*          Bear in mind that the original appraisal was at $***,000. in June of ’07 and that your banks’ most recent appraisals were at $***,000. and $***,000.  In other words this was not an ordinary home mortgage problem as the area and the parcel (1.65 acres) are in Rockville, Utah, adjacent to Zion National Park (named in the Men’s Journal as in the top 10 small towns to live in, in America in 2005.)

*          To date I have put at least $100,000. into the project + sweat equity.

   It appears that my only guilt in this process is choosing the wrong time to build a dream home.  Tom Rutter admitted to me that if I had built this a year earlier none of this would have happened to me.  However it seems very unfair to have me bear so much.  I could handle the draw refusal or the added points  by themselves, but to have to take on both borders on cruel and unusual punishment.   

   At some point during my discussions with your bankers it was disclosed to me that the loan had to change so that it would fit into your bank’s current protocols for my being able to afford the loan.  This is ludicrous!  By saddling me down with this excessive debt at the end of my run on the project your bank has made it less affordable for me to make this work.  Making it more affordable would have been to giving me the full funding for the construction phase.   Or your bank could have allowed the points instead to actually buy down my loan to 80%, thus reducing my mortgage payment and negating the need for mortgage insurance.   This latter point would have brought down my payments from $*,*00. to $*,*50. or so.  That would have been a service to a client instead of some small amount of money for your individual bank in St. George.  As it stands now I will have outstanding payments to high interest loans that go well beyond what my payments would have been had the original $***,000. for my construction been honored.

   Perhaps I have the wrong impression of your bank; as I long standing customer I have always thought of your business as a service business, with the dual mission of profit and service.  However, my experience with this mortgage is changing my impression. 

   I humbly ask your office to investigate this loan to see if there is anything that can be done to change it so that all parties could be happy.  I mentioned the points to ‘buy down’ above, which would make it work for me much better in order for me to get out of high-interest debt easier.  Or a full funding of my last draw. Without some sort of change it will be exceedingly difficult for me and my family.  And again my only fault was timing;  in fact I finished when I said I would and my home appraised higher in the meantime.  I believe I deserve better service in this mortgage.  I appreciate your time and consideration in this matter.  Thank you.

Best Regards,

Dennis Brooks, OMD