----- FACTS -----

              --- OVERVIEW OF THE ACTION ---

    41.  The issues in this action initially began when PLAINTIFFS
began inquiring about financing possibilities regarding the purchase
of their new intended home in Virginia, in the Spring of 2005.
PLAINTIFFS approached WELLS FARGO about financing the Virginia
property, with a bridge loan until the sale of their current house
which was then on the market, for sale by owner (hereinafter
"FSBO"), but were told that the better way was to use the large
equity in that property.  WELLS FARGO was then servicing the current
mortgage of Plaintiffs property, located at 18 Fair Street, Village
of Cold Spring, NY 10516, (hereinafter "PROPERTY") which is located
in the county of Putnam, in the Nineth Judicial District, and
therefore the proper venue of the United States District Court,
Southern District of New York.

    42.  Plaintiffs had owned and resided in the PROPERTY for over
24 years, have done much work in restoring this historic house that
greatly increased their equity, enough for PLAINTIFFS to have been
able to purchase their new home in Virginia, pay off all their
credit cards, and leave them with a very comfortable bank account.

    43.  PLAINTIFFS in detailing the following paragraphs of the
description, condition, and fair market value of the PROPERTY,
particulary regarding the equity to be gained if the property could
be later forced into foreclosure, is to set background for the
obvious reasons, incentives, and intentions by the Defendants, both
individually, and in concert, in order to eventually gain control
and help themselves to PLAINTIFFS' very large equity in the
PROPERTY, a concept known as theft of equity.

                  --- ABOUT THE PROPERTY ---

    44.  The PROPERTY is a prime house, built in 1855, is on the
National Register of Historic Homes, comprises 3080 square feet on
three floors, has five private bedrooms with four full baths, and is
located 1/2 block from Main Street in the Historic Village of Cold
Spring-on-Hudson several blocks from the Hudson River.  The PROPERTY
also has a very large four stall Carriage House and large loft, the
carriage only one in the lower part of the Village.  The carriage
house is larger than the three houses located behind it.  This
PROPERTY is also legal for a bed and breakfast, the house is
extremely original and is arguably one of the eight best properties
in the entire Village.  The PROPERTY has been on four of the open
house tours sponsored by the Cold Spring Area Chamber of Commerce of
which PLAINTIFFS served on the Board for many years.   All in all
this is an extremely desirable piece of property.

    45.  The fair appraisal value as determined by Defendant WELLS
FARGO for the refinancing on the PROPERTY was $868,000.00, just
under $1,000 from PLAINTIFFS own appraisal when PLAINTIFFS first
offered it for sale, just prior to the refinancing.


               --- REFINANCING THE PROPERTY ---

    46.  In the beginning of 2005 PLAINTIFFS decided to sell their
PROPERTY and move to Virginia after having found a property that

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they wished to purchase, and on or about April 5th PLAINTIFFS
visited the Fishkill New York branch office of WELLS FARGO, to see
about securing a type of bridge loan or any other financing in order
to purchase their new desired home, and were put in contact with
Defendant WELLS FARGO'S employee representive co-Defendant AGENT
FRANCIS.

    47.  PLAINTIFFS were told by AGENT FRANCIS that a bridge loan
could not be done except within the State of New York, but that she
on behalf of WELLS FARGO stated that they could easily rewrite a
completely new mortgage that would pay off all the existing
mortgages/ liens and give the Plaintiffs a cash-out that would
enable PLAINTIFFS to purchase the Virginia property outright.

    48.  At that first meeting at the WELLS FARGO office, and upon
reviewing PLAINTIFF'S then excellent credit rating which at that
time averaged 764, and interviewing PLAINTIFFS about the house
value, location, etc., AGENT FRANCIS recommended that PLAINTIFFS
refinance the entire property for $650,00 or 75% of the value of the
PROPERTY, and that would pay off all existing mortgages with enough
cash out to purchase the property in Virginia outright.

    49.  AGENT FRANCIS knew that PLAINTIFFS were in the process of
selling the PROPERTY, and gave assurances that the refinance would
be quick, easy and that they should be able to close on the
refinance in about two weeks because of PLAINTIFFS excellent credit
rating, and because WELLS FARGO was currently servicing PLAINTIFFS
then current mortgage.  Agent Francis further advised that we had to
take the house off the market in order to refinance.

    50.  PLAINTIFFS' then current mortgage was issued in 1995 for
the sum of $162,000.00 (hereinafter "ORIGINAL-MORTGAGE") with
another lender who later sold or transferred the mortgage to
Mortgage Electronic Recording System (hereinafter "MERS"), upon
information and belief sometime in 2001.  This mortgage was a fixed
rate, 30 year mortgage with a 7.25 per cent interest rate.

    51.  PLAINTIFFS, based upon the above stated assurances, told
AGENT FRANCIS to go ahead with the loan application and she then
gave PLAINTIFFS a mortgage pre-approval letter, dated April 6, 2005,
so PLAINTIFFS could go immediately into contract with the Virginia
property as time was of the essence in order to purchase it, as the
seller claimed to have another buyer.

    52.  PLAINTIFFS immediately forwarded the pre-approval letter to
the seller of the Virginia property and entered into a purchase
contract, confident that matters should proceed somewhat smoothly
based on the assurances given by WELLS FARGO representives.
Defendants were after all, long established professionals operating
under the umbrella of State and Federal guidelines.

    53.  After PLAINTIFFS agreed that Agent Francis would submit the
loan application, PLAINTIFFS had on several occasions during that
time attempted to contact AGENT FRANCIS regarding the status of the
loan application that PLAINTIFFS had never received a copy of nor
received a Good Faith Estimate (GFE) for this loan.  It was during
this period PLAINTIFFS discovered the elusiveness of AGENT FRANCIS.

    54.  On or about April 28th, 22 days after applying for the loan

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PLAINTIFFS were informed by AGENT FRANCIS that WELLS FARGO had
turned down the application for this particular loan plan stated
that the "cash out" exceeded some arbitrary amount, and, of course,
AGENT FRANCIS was just as "Shocked" as PLAINTIFFS were, and said
that WELLS FARGO "changed the terms of the plan" that she had based
the application and stated that the cash out that PLAINTIFFS were
seeking exceeded the amount for this plan. When PLAINTIFFS
questioned if a lender could just change their conditions at will
FRANCIS said "Oh, it's done all the time".

    55.  This set back now put PLAINTIFFS in a serious time crunch,
because it was now less than a month to closing, and PLAINTIFFS
found that it was too late to go elsewhere for a refinance mortgage,
but when asked what could be done, AGENT FRANCIS stated that she
already had an alternative plan all figured out, that PLAINTIFFS
should refinance for $522,000 or now only 60% of the PROPERTY value
and apply for a home equity line of credit for $150,000.  So
PLAINTIFFS, now finding that their backs were against the wall
because of the purchase contract closing date, and having no
alternative, PLAINTIFFS had to authorize AGENT FRANCIS to apply for
this additional plan, again with her assurance that we would would
have the approval with plenty of time to spare.

    56.  As stated above, PLAINTIFFS were "turned down" on their
original $650,000 loan application because WELLS FARGO now claimed
after they accepted the original loan application, "that the cash
out amount exceeded what they wanted to loan on the PROPERTY",
(after they changed the terms) however, the combination of the two
proposed mortgages now exceeded the original loan amount by over
$35,000.00.

    57.  So on or about May 3, 2005, PLAINTIFFS signed and returned
the WELLS FARGO counter offer, with an interest rate actually was
slightly lower (6.125%) than the original plan applied for (6.75%),
but both offers were to be ARM type of loans, but since PLAINTIFFS
were going to immediately sell the mortgaged PROPERTY, PLAINTIFFS
felt that an ARM should not adversely affect their position, nor
bother to question why it was an ARM in the first place.  When
PLAINTIFFS had previously refinanced the property with the
ORIGINAL-MORTGAGE back in 1995, for $162,000.00, that current
mortgage always had a fixed rate as did subsequent second
mortgages.

    58.  PLAINTIFFS finally received a committment letter dated May
13, 2005, from WELLS FARGO (hereinafter "COMMITMENT LETTER") for the
revised loan application of $522,000, and based on the COMMITMENT
LETTER got the seller's closing attorney to extend the closing date
on the Virginia property purchase as May 16th was set for WELLS
FARGO refinance closing.

    59.  However, PLAINTIFFS still had to apply and be approved for
the home equity line with WELLS FARGO, because without the home
equity line for the additional amount, the revised figure of
$522,000 was totally useless since it did not give PLAINTIFFS the
necessary funds for closing on the Virginia property.  So PLAINTIFFS
were still under pressure and concerned about the ability to
finalize the Virginia property transaction.



                              - 9 -
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    60.  PLAINTIFFS then notified the seller that immediately upon
closing for the refinance, PLAINTIFFS would forward a 10% good faith
deposit ($30,000) to hold the property for which WELLS FARGO through
AGENT FRANCIS was fully aware as PLAINTIFFS, perhaps foolishly, kept
her constantly informed.

    61.  PLAINTIFFS primary and major concern in carefully reviewing
the COMMITMENT LETTER, was that there was no early prepayment
penalty, especially since PLAINTIFFS would be immediately selling
the PROPERTY, and all the existing three mortgages were listed and
were to be paid off at closing for which there were 2 with HFC and
the 1995 $162,000.00 mortgage WELLS FARGO had been servicing on
behalf of MERS, that had a mortgage balance of $143,409.56.


              --- AT CLOSING FOR THE REFINANCE ---

    62.  On May 16, 2005, the closing date, PLAINTIFFS met in the
offices of WELLS FARGO'S settlement agent and attorney, Dominic J.
PENZETTA Esq., expecting a normal and conventional refinancing
procedure such as PLAINTIFFS had experienced with prior
refinancings.  Also present was a representative from the title
company, an Ellen Juracek, of River City Abstract (RIVERCITY
ABSTRACT).  Ms. Juracek came prepared with three (3) payoff
letters including one from WELLS FARGO for the outstanding amount of
$143,409.56 the balance on the original 1995 $162,000.00 mortgage,
as she was prepared to disburse the funds for each of the 3 loans.

               - GAP and CONSOLIDATED MORTGAGE -

    63.  Then to PLAINTIFFS' surprise, shock and confusion, Mr.
PENZETTA instead presented PLAINTIFFS with two (2) completely
seperate mortgages, one a "gap" mortgage for $380,346.31
(hereinafter "GAP MORTGAGE") and the other a "consolidated mortgage"
for $522,000.00 (hereinafter "CONSOLIDATED MORTGAGE").

    64.  Upon hearing this, Ms.  Juracek from the title company
became flustered and agitated, as evidently she was no more prepared
for this sudden revised plan than PLAINTIFFS were.  At Ms.
Juracek's urging, she demanded that PENZETTA make a phone call to
WELLS FARGO to verify and straighten the situation out, at which Mr.
PENZETTA the left the room to make a call to someone apparently at
WELLS FARGO, but upon his return made a statement to the effect
that's how it was going to happen, no alternatives.

    65. PLAINTIFFS were in effect presented with a new situation
which had never been given or even suggested prior to the time of
the immediate signing, which amounts to a contract of adhesion, or
in other words "take it or leave it", a tort under New York State
Contract Law, though PLAINTIFFS did not know it at that time.

    66. Now at the closing that morning, PLAINTIFFS being committed
under contract for the purchase of the Virginia property that
PLAINTIFFS had spent several years looking for in the area, since it
was only 3 miles from PLAINTIFF Jean's sister, PLAINTIFFS fell in
love with the property, but worse was that the seller was very
anxious to close as he stated on several occasions that he had
another ready and immediate buyer.


                              - 10 -
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    67.  WELLS FARGO at that time was fully aware of PLAINTIFFS
serious time predicament and the real possibility of losing the new
Virginia property as PLAINTIFFS had kept WELLS FARGO fully informed
through AGENT FRANCIS about the serious time pressures, expecially
the needless delays which were not of PLAINTIFFS making, so that
PLAINTIFFS were now left with no alternative but to sign both
mortgages and other apparent related paperwork.

    68.  Mr.  PENZETTA did not even bother stay through the closing
procedure, but instead signed the HUD-1A Settlement statement and
then quickly left his office, turning over the balance of the
closing procedure to an apparent assistant of his (hereinafter
"CLOSING ASSISTANT").

    69.  Without having sufficient time to make a proper and
informed decision by holding up the closing procedure, PLAINTIFFS
now carefully read over for the very first time this newly presented
paperwork, taking particular, critical, and close interest in the
wording of the CONSOLIDATED MORTGAGE that had been presented, the
HUD-1A (ref. RESPA (2/94)) Settlement Statement dated May 16, 2005,
(hereinafter "SETTLEMENT STATEMENT") and the "Confirmation of
Disbursement... (RC091L Rev 03/02/04)" document dated May 13, 2005,
(hereinafter "DISBURSEMENT STATEMENT"), each of which is discussed
in more detail in the paragraphs below.

    70. As PLAINTIFFS were going to immediately sell their PROPERTY,
the concern that there would be a clear title from the ORIGINAL
MORTGAGE was of paramount importance, and these documents as
presented to PLAINTIFFS by WELLS FARGO directly, and through their
agents, were heavily relied upon by PLAINTIFFS for their direct,
clear wording and for the following reasons as shown below.

                     - COMMITMENT LETTER -

    71.  The primary concern of PLAINTIFFS in deciding to continue
with the closing was the plain, clear, and direct and unambiguous
wording on the COMMITMENT LETTER on page 4 which clearly stated
"EXISTING LIENS Unless otherwise provided in the specific conditions
section of this commitment, any and all existing liens on the
property must be paid in full at closing."

    72.  And additionally on page 7 of the COMMITMENT LETTER under
"CONDITIONS OF LOAN APPROVAL (cont'd)" demanded "PAYOFF ALL LIENS OF
RECORD AGAINST SUBJECT PROPERTY."

               - HUD-1A SETTLEMENT STATEMENT -

    73.  PLAINTIFFS took further comfort from the HUD-1A SETTLEMENT
STATEMENT which confirmed the directions and demands of the
committment letter that the three (3) disbursements to be made to
pay each off each the three (3) 3 outstanding loans including the
one claimed or serviced by WELLS FARGO, the wording under "M.
DISBURSEMENT TO OTHERS 1501 WELLS FARGO BANK, N.A.  143,409.56"
which was the balance from the ORIGINAL MORTGAGE of $162,000.00.

    74.  The SETTLEMENT STATEMENT was at that time already signed by
WELLS FARGO'S closing agent PENZETTA, who by now had already left
the office as the closing began, and therefore was not available for
questions.  Upon information and belief, the agent PENZETTA left to
complete the closing was not an attorney and officer of the court.
                              - 11 -
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    75.  PLAINTIFFS took comfort and reassurance that when PENZETTA
signed the SETTLEMENT STATEMENT which clearly reads at the bottom
"The undersigned hereby aknowledges receipt of a completed copy of
this document.  To the best of my knowledge the HUD-1A ref.  RESPA
Settlement Statement is a true and accurate account of the funds
which were received and have been or will be distrubited by the
undersigned as part of the settlement of this transaction."

    76.  The SETTLEMENT STATEMENT was signed by PLAINTIFFS and also
by PENZETTA as "Settlement Agent".  This wording was also very
instrumental in PLAINTIFFS decision to continue with the closing as,
after all, PENZETTA is an officer of the Court and therefore a
responsible person.

             - UNIFORM RESIDENTIAL LOAN APPLICATION -

    77.  PLAINTIFFS were further assured of WELLS FARGO'S intention
to pay off the ORIGINAL MORTGAGE of $162,000.00 on the "UNIFORM
RESIDENTIAL LOAN APPLICATION" Freddie Mac Form 85 01/04 and Fannie
May Form 1003 01/04 EP225L 04/02/04, dated May 13, 2005, given
PLAINTIFFS three days prior to the closing which also clearly and
unambigiously stated under "LIABILITIES" "WELLS FARGO HOM SECOND
MORTGAGE TO BE PAID OFF" in the amount "142,098.00" which was the
balance of the $162,000.00 from the ORIGINAL MORTGAGE, at closing
ended up at $143,409.56.

    78.  PLAINTIFFS were further given a copy of payout statements
of the checks to be disbursed by the TITLE COMPANY, dated May 16,
2005, the day of the closing, which clearly showed "Wells Fargo
$162,000" and at the bottom of the page written by hand a circle
with the digit "6" inside with the amount "$ 143,409.56" which was
the balance of the ORIGINAL MORTGAGE.  There were six (6) circled
numbers, each representing an actual check to be cut, so therefore
PLAINTIFFS were again assured the ORIGINAL MORTGAGE and been
intended by WELLS FARGO to be paid and closed out.

    79.  At the closing, PLAINTIFFS were presented with the Truth in
Lending Disclosure Statement dated April 29, 2005, (hereinafter
"TILA STATEMENT") the very same day as the closing.  This statement
showed the individual loan amount to be $522,200.00, the amount
affirmed PLAINTIFFS were indeed getting a total refinancing (all new
money in one package, one note, one mortgage) for $522,200.  This
wording reaffirmed to PLAINTIFFS that the CONSOLIDATED MORTGAGE was
the only real mortgage that would be outstanding against the
PROPERTY.

               --- THE CONSOLIDATED MORTGAGE ---

    80.  As stated above, PLAINTIFFS were given the prepared
CONSOLIDATED MORTGAGE, along with a prepared Consolidation Agreement
(hereinafter "CONSOLIDATION AGREEMENT") a Fannie Mae/Freddie Mac
Uniform Instrument Form 3172 1/01 document, both of which were dated
May 16, 2005, the morning of the closing and seen by PLAINTIFFS for
the very first time.

    81.  The direct and unambiguous wording on the CONSOLIDATION
AGREEMENT states, inter alia, on page 2 of 9 the following:



                              - 12 -
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    "II. AGREEMENT TO COMBINE NOTES AND MORTGAGES

    (A) By signing this Agreement, Lender and I are com-
    bining into one set of rights and obligations all of
    the  promises and agreements stated in the Notes and
    Mortgages including any earlier agreements which
    combined, modified, or extended rights and obligations
    under any of the Notes and Mortgages.  THIS MEANS THAT
    ALL OF THE LENDER'S RIGHTS IN THE PROPERTY ARE COMBINED
    SO THAT UNDER THE LAW LENDER HAS ONE MORTGAGE AND I
    HAVE ONE LOAN OBLIGATION [emphasis added] which I will pay
    as provided in this Agreement.  This combining of notes and
    mortgages is known as a 'consolidation'."

    "III.  AGREEMENT TO CHANGE TERMS OF THE CONSOLIDATED NOTE

    Lender and I AGREE THAT THE TERMS OF THE NOTES ARE CHANGED
    AND RESTART TO BE THE TERMS OF THE 'CONSOLIDATED
    NOTE'(emphasis added) which is attached to this Agreement as
    Exhibit C." ...

    "The CONSOLIDATED NOTE WILL SUPERSEDE (emphasis added) all terms    ,
    covenants, and provisions of the Notes."

    "IV.  AGREEMENT TO CHANGE TERMS OF THE CONSOLIDATED MORTGAGE

    Lender and I AGREE THAT THE TERMS OF THE MORTGAGES ARE
    CHANGED AND RESTATED TO BE THE TERMS OF THE 'CONSOLIDATED
    MORTGAGE'(emphasis added) which is attached to this
    Agreement as Exhibit D.  The Consolidated Mortgage secures
    the Consolidated Note and will constitute in law a single
    lien upon the property.  I agree to be bound by the terms
    set forth in the Consolidated Mortgage which will
    supersede all terms, covenants, and provisions of the
    Mortgages."

    82.  As stated above, the CONSOLIDATED MORTGAGE must be
"...attached to this Agreement as Exhibit D." and PENZETTA'S
ASSISTANT directed PLAINTIFFS to sign the CONSOLIDATION AGREEMENT
and the CONSOLIDATED MORTGAGE, which she then signed as a witness.

    83.  A further supporting document titled "SETTLEMENT AGENT
ACTION REQUIRED" notes "Disbursement of Loan Proceeds" states "A
check or money wire will be sent to you in the amount of $523,150.86
which includes Loan Amount $522,200.00" which is another piece of
evidence for the loan amount as committed to by WELLS FARGO.

    84.  This is a clear violation of RESPA since the terms of the
mortgage changed to Defendants detriment at the last minute before
the closing.  That detriment is clearly acknowledged in Plaintiffs'
Affidavit where they now claim "latches" against Defendants defense
as stated in Plaintiffs' Affidavit, paragraph 18.

    85.  Again, it was the reassurance from the wording on the
CONSOLIDATION AGREEMENT, the CONSOLIDATED MORTGAGE, the UNIFORM
RESIDENTIAL LOAN APPLICATION, the HUD-1A SETTLEMENT STATEMENT, the
COMMITMENT LETTER, and the reassurances by PENZETTA that this was a
normal procedure and that only the CONSOLIDATED MORTGAGE was the
surviving and single mortgage on PLAINTIFFS PROPERTY, and the sole

                              - 13 -
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reason for PLAINTIFFS signing and continuing the closing process
that morning.

    86.  After the 3 day recission period PLAINTIFFS notified AGENT
FRANCIS to continue with the equity loan application portion,
comfortable at that time that there was not anything amiss with the
WELLS FARGO financing.

                 - CERTIFIED PAYOFF LETTER -

    87.  PLAINTIFFS shortly after closing on the CONSOLIDATED
MORTGAGE portion of the financing, received a "Certified" document
in the mail from WELLS FARGO dated May 23, 2005, (hereinafter
"CERTIFIED PAYOFF LETTER") that contained the following unambigious
wording regarding the ORIGINAL MORTGAGE and stated the following:

    "Wells Fargo Home Mortgage
    This certifies that Scott E. Webster Jean Allen Webster
    has paid in full loan 685-4061738 on May 23, 2005 for the
    property of 18 Fair Street, Cold Spring NY 10516*"
    ...
    "* This certification acknowledges receipt of funds
    submitted as payoff of the above referenced loan."

            - SATISFACTION OF ORIGINAL MORTGAGE -

    88.  This was further confirmed by WELLS FARGO in writing a loan
satisfaction for loan number 685-4061738, the ORIGINAL MORTGAGE and
dated May 24, 2005, (hereinafter SATISFACTION OF MORTGAGE") also
mailed to PLAINTIFFS, which clearly stated for the ORIGINAL
MORTGAGE:

    "Congratulations! We are pleased to inform you that we
    have processed the funds necessary to pay your loan in full."
    ... "We will mail loan satisfaction documents to you or to
    your county recorder, according to your state guidelines."

    89.  With receipt of these two documents, PLAINTIFFS were
relieved that the ORIGINAL MORTGAGE had been paid and satisfied we
didn't give it a second thought until Wells Fargo attempted to
foreclose on it a year and half later.

                   - EQUITY LINE OF CREDIT -

    90.  On June 10, 2005, PLAINTIFFS signed the paperwork for the
equity loan (actually, an equity line of credit) with very mixed
feelings, but relieved that the purchase our retirement home can
happen, but dismayed at the terms of the equity line of credit.  The
initial Annual Percentage Rate of 6.875% sounded good until
PLAINTIFFS read further down the page that the "Daily Periodic
Finance Charge Rate...will be adjusted the day of an Index Rate
change..." and further on "The Annual Percentage Rate...will never
be more than 18%". What!? we were certainly never told there would
be terms such as these.

    91.  PLAINTIFFS had no alternative at this point but to continue
with the WELLS FARGO scheme, or loose the $30,000 down payment to
secure the Virginia property.


                              - 14 -