The Evidence

Date: Monday, January 26, 2004 12:01 PM to Sunday, February 15, 2004 11:59 PM
Who´s in charge of monitoring fiduciary responsibility: No one?

Arcane law? Which ones? How do you zero in on the relevant laws? Talking to various law librarians, the suggestion (after get yourself a lawyer which both Sayre daughters had already done with the result that one lawyer favored waffling and the sisters were still facing eviction) was to read the law treatises for relevant examples rather than beginning with the text of the law books. So we sought likely titles to work on and identified which law databases were accessible online...

One fundamental principal of law practice is that the client is the only one who really knows the details, which to any sane person means that they are the only one who should comb the law for applicable ordinances. Lawyers need not apply. So we accumulated the hours and access options to find a site where we could hunt together. Clermont County´s Law Library offered reservable conference rooms where a team of us, including the aggrieved parties, could divide the relevant treatises and share results, puzzles and details.

In the interim til we could organize a search party, I took the most likely terms, like "enforcement", and went hunting for who was in charge of making the system function appropriately. With treatise titles like Ohio Real Property Law and Practice, Ohio Probate Law, Wills, Trusts and Estates, Trusts and Trustees, it seemed state law was the place to start. At the database of Ohio law, the search engine identified an office called the Superintendent of Banking. But calling the contact number from the phone book, led to a difference of opinion. One member of the office said they did monitor trust companies, but the individual they referred us to said to contact the US Treasury´s Office of the Controller of the Currency who had a Consumer Complaints contact.

However, Pam Grandin in that position clarified the peculiar situation where the only thing the office monitors is ´soundness´ although it seemed a bit strangely illogical to think there would be ´consumer complaints´ about something as actuarially complex as ´soundness´. We however persisted, suggesting that a bank that would engage in selling properties held in trust for significantly less than their appraised value must be seriously in need of funds since their most serious fiduciary responsibility, namely to the trust beneficiary, was certainly not served by such a strategy. Hmmmm...

That leaves the County´s evidence to consider: the Auditor´s records are helpful

Since apparently no one was in charge of fiduciary responsibility in the state or the federal government, we decided to pursue the Hamilton County Auditor´s records. Since ´soundness´ of their appraisal of the property was a key question, and since they would need to monitor or measure that, we asked to speak to the appraisal office to see what error-tolerance was the basis of their quality-control limits. This probing however made the fellow rather nervous so the most he would say was that they followed standard state-law-mandated practices, which amounted to 3-year and 6-year audits. The 3-year audit basically was applying each area´s appreciation rate to all the homes in the area. The appreciation rate for an area being determined by monitoring and averaging the increases in selling prices, for the homes in the area, over their recorded valuation. The 6-year audit was more in-depth and, in other counties I´ve spoken with, involved something akin to physically going around to area sites but he wanted any further questions answered by their expert in public relations, Paula Drake, who preferred to defer the issue to the records themselves, rather than statistical measures.

Apparently, all the county´s property records are online but you need the latest browser versions to access them. She pulled the property record up and came to an abrupt halt because the bank was listed as the owner so as far as the county was concerned, the bank was entitled to sell it. Period. Though ethically she acknowledged that laws on fiduciary responsibilities might come into play, she felt her interest in the affair limited, though I noted that the tax bill was not sent to the bank but to Ann Sayre at her home address.

The auditor´s office estimated the value of the Sayre home to be worth $208,000 along with an assortment of estimates and relevant data: Note that because the bank is listed as the owner, Ann is deprived of the homestead exemption that she would rightfully have been entitled to had there never been a trust involved at all. About a $5,000 loss over the 10-year bank management. Nor does it show the stages of additions, remodels and renovations that started with the 1910 home that the Sayres moved to in the 40s and built around, onto and inside til there´s practically none of the original home left. (Later additions like the garage in the 80s were listed in the Improvements section but earlier records were apparently sparse.) We discussed the tactics for searching the auditor´s records so that I could download all the data for area properties and sort them to isolate records from Anderson township by their 500- code in the parcel number.

Examining the auditor´s appraisal of the land

One of the options at the Auditor´s database was to look at "Similar Sales", presumably for use by appraisers and realtors. So we recorded the Sayre data and went to look at what properties were considered comparable.
To adjust the value of properties with similar views and grades, we need only to adjust for size differences. Larger lots have progressively lower per-acre pricing, a sliding scale we picked up from MLS examples, useful for comparing advertised land. Adjusting the three similars´s price of the land, per acre, for the sliding scale, and averaging the adjusted values yielded a $144,000 estimate for the Sayre land. Note that the Auditors were clearly aware of the natural landscaping and it didn´t seem to bother them in arriving at their valuation of $153,400.

Searching the MLS marketplace records for the status of the Sayre property sale

Looking through the data available on various properties was reminiscent of MLS listings, which was also public data and more recent, consisting of ´active´ properties and those under contract, which should include the Sayre home. Whereas the auditor´s records had only the last sale price, firmer but outdated in nearly all cases except for the accuracy of the appreciation rates used, the auditor did have the advantage of having every parcel to choose from not just those currently active, however up-to-date those were. But there was another reason to search the MLS, there was the question of how in the world the property had been sold, since no one had come to see it. Had it even been put on the market legitimately? Was someone connected with the bank getting the land at fire-sale price, an insider somehow?

The house apparently had not been listed in the MLS to get it under contract since the database had no record of it. Not in Anderson Township nor Newtown. However the MLS did have listings for other properties in the area. All were however very urban or suburban and basically not comparable for the land in its natural state.

Looking for comparable land-- private, with panoramic view --in the current market

So we searched for land for sale in the acreage section, which produced two properties in the Anderson Township area that looked promising. After emailing each agent with questions to try to quantify missing data in the descriptions that would rank them in comparison to the Sayre property, we arrived at the following comps: Like an appraiser or a real estate agent, we modified the first listing to adjust for the number of acres (using a sliding scale to reflect the usual lower price per acre for larger tracts) and adding a modest $15,000 for basic older improvements on the Sayre land (driveway, septic, water) arriving at an estimate of $128,000. The second listing turned out to sound like it was more valley-like, pleasant nature view maybe but not the mountaintop view but modifying for the acreage difference and improvements needed (water and sewer were not really available for at least a year or two there anyway) resulted in $132,000. Even the straight average of the two, yields $130,000 for the land and basic improvements alone. Which happens to more or less correspond to the land valuation at the Auditor´s office.

With the MLS and the Auditor in agreement on the land, how could the bank accept so much less?

The MLS and the Auditor being consistent and nothing like the bank´s appraisal, makes the bank´s actual agreement to a contract for $108,000, max, tantamount to incompetently or maliciously depriving Ann of a home of her own to live in with her sister and their cats with no compensation for it at all, as well as losing roughly $22,000 to $45,000 on the land and utilities alone. An unmistakable breech of fiduciary responsibility. Do bankers and their trust management collect fees for not thinking! Or, of course, they could be engaged in something worse and think the rest of us are that stupid or helpless, or both.

And lest anyone suggest for a moment that the bank´s appraisal justified them, ask yourself what you would do if your own appraiser assessed such a monstrous difference in valuation from what you had been paying taxes on. If the bank was a decent trustee for the land, they should have been embarrassed that the property they were entrusted with to manage had been running up excessive taxes to burden their supposed beneficiaries for at least the last 5 years of their management. That´s $3,000 in excess taxes because of lack of attention to the management of the property. In addition, using the free online MLS, or calling in a competent real estate agent or two for a free, knowledgeable opinion would cost you nothing and add credibility to one or another valuation, You´d do that because you would care about your wellbeing, and avoiding the loss of $100,000 (which is the choice the bank made in accepting the contract offer over the official county auditor´s valuation) would be worth your time and effort... majorly.

And $130,000 using the MLS or $144,000 using the auditor´s database was just for the land. How could any competent handler of real estate not demand more specifics on such a twisted appraisal as they had accepted? A $100,000 deduction on the basis of "peeling paint" and "grass not cut in a very long time", even "clutter" -- nothing substantive given like furnace inoperable, roof age exceeded, the septic field noticeably failing and water supply shut down with moldy odors from makeshift water handling, like the foreclosure we saw recently that another bank sold for the land-and-basic-improvements value, which is what this bank was doing based on peeling paint.

And yes, there are definite problems with the house that need addressing but they are not financially major and the Sayres are there to answer the questions a handyman would need to know. They had the furnace serviced every heating season but the propane bills are too high. The roof drains to the cistern require a coat of rubber patch to seal the roof flashing around the drain. And the electric well pump needs attention. All of which makes the bank a miserable landlord. But as trustees, they should have been much more than landlords who are not charged with their tenant´s sources of income, though a caring landlord may casually, personally keep in touch with his or her tenant´s circumstances. In fact the original agreed expectation was that the bank would do site visits at least once a year. But that duty was neglected after only one visit in the beginning.

What´s the flaw in the bank´s appraisal of the land?

Looking at the appraisal, from TheLandscapingBigot Inc, namely Tom Strottman of Strottman Appraisals, Inc., the standard process of identifying comparables was done possibly adequately, giving: At that point the "fine tuning " of each of those properties had to have been done with an axe in order to arrive at a bottom line of $125,000 total, with land alone valued at only $90,000. That gross a step away from comp should have triggered questions for specifics on what was in the cuts. Any thinking person would have taken a ballpark value for the house like $90,000, or so, (based on the county auditor´s records) off of each of those supposedly comparable properties and modified the acreage size to match the Sayres and arrived at $115,000 as a ballpark value for the land -- a $25,000 difference from the Strottman´s $90,000 assessment of the land that should have led to the focussed examination of the appraiser, not acceptance. Certainly not rabidly accepting a backroom offer for less than that-- no notice of a nominal value for septic, well, cistern and parking area which should have yielded another $15,000 at sale time, without even thinking about the house itself yet. Even if the Auditor´s records list the year it was built as 1911, they also list other outbuildings added later and the house design doesn´t look like a house of that vintage so it would be inexcusable not to have acquired that age data. There would be no excuse for using that ancient date in the fine tuning for the house, much less the land. "Typical view, grass uncut" suggest bigotry at work.

The question also arises of why Strottman chose different comps than the Auditor´s similars which are much closer to the Sayres, especially since he purports to put nearly no value in the house, making it imperative to be accurate on the land. Strottman instead chose homes not nearly as close physically but definitely close in true vintage, focusing on the house not the land and exhibiting recognition that the 1911 date was known to be invalid. Doubly penalizing the Sayres by ignoring the cardinal rule of location, location, location when it is their advantage and then devaluing the home vehemently later, to compound the negative errors. His third ´comp´ isn´t even in Anderson, but in Mt Washington

Appraiser´s doubly penalizing comps (in blue):

7083 Paddison
(sold 7/03 for $200,000 with 2.18 ac land $83,000 and avg grade

7114 Ragland
(sold 9/02 for $197,000 with 4.85 ac land $103,000 and avg grade

6600 Corbly
(sold 6/02 for $164,000 with 2.3 ac land $84,000 and avg grade 		MLS844146.jpg
The Sayre home is the unnumbered star. 		Auditor´s Comps (in red):

7452 Heatherwood
(sold 7/01 for $229,000 with .54 ac land $63,000 and good grade)

2480 Royalview
(sold 5/01 for $215,000 with 1.07 ac land $70,000 and good grade)

6939 Treeridge
(sold 4/01 for $267,000 with .67 ac land $85,000 and good grade)

Studying the auditor´s maps for each of these sites, it becomes apparent that the appraiser´s selections are either directly off a busy road, abut a high density development on postage stamp lots or sit in bottomland with a substantial creek across the foot of their road access with a lot of mowing to maintain. By contrast, the auditor´s choices tend to be on either private drives, quiet cul-de-sacs or surrounded by substantial size lots. Hence the difference in the market value of the land is expected. The Sayre´s fits the auditor´s pattern of seclusion and privacy, with the added merit of the panoramic view from its perch on the top of the hill. The bank may not care, but Mary-Jane and Ann deserve to have the merits of their location recognized.

Fiduciary responsibility, managing a home as a financial asset and the bank´s conflict of interest.

Which leaves the house to consider. As an exercise in fiduciary responsibility, this house itself offers pertinent evidence. A house is a major investment for any human-scale person. So how did these trustees manage that value, which they now dismissed as worthless though we see evidence of substantive merit. Even without disputing the issue yet of its market value, deferring that for a moment, a house is a performing asset that any intelligent financial manager with responsibility for that asset would be bound to attend. The most obvious, and usually the largest, performance variable is the energy cost so attention to the heating and cooling systems would be a major consideration. In this case Mary-Jane and Ann were paying $2400/year for propane to cook, to heat water, and for heating the house´s conditioned space. From personal experience this was excessive, especially considering the home´s design features and its occupants´ conservation mindset. A simple phone call away, Jim Tenhundfeld of the Home Weatherization Assistance Program, an organization that´s part of a longstanding national resource to assist low-income tenants and homeowners with energy concerns, agreed and was eager to help. His group is stepping in to test the various system components and to offer interim support.

But where were the managers of this asset since this situation is long term? Either as simple attention to major asset components or to the financial distress of your intended beneficiaries, a brief consultation with an energy engineer and ordinary shopping for equipment replacement produces ballpark values -- based on occupancy, floorplan, local weather requirements, interest rates and prices-- that should excite a standard financial payback assessment leading to action.

Insulation would be the fallback alternative to equipment replacement and generally even less expensive a solution. For concrete block construction, the insulation can be applied to the exterior and stuccoed over, especially around the perimeter of the slab where radiant floors are most vulnerable to heat loss. A much more minor expense than replacement of the furnace. By comparison, consider the bank strategy as an alternative use of funds in this assessment. Less liquid but safe investments, over the 10-year term during which the trust has been managed by the bank, were earning 5% per year, returning $6,800 for that starting $4,200 while the "beneficiaries" were hemorrhaging $12,445 in wasted funds on excess propane for lack of decent asset management. That combined bottom line is a net loss of -$5,645. Stock market was even worse over the period, however we will soon get a chance to study the probate court filings to see the bank´s actual performance. Stay tuned for more action and analysis. In the interim, an interest rate approach will suffice.

Actively managing the property in the trust would have produced an $8,645 gain -- beneficiaries and bank combined -- over the 10-years instead of the net loss of -$5,645, the way the bank handled their trust affairs. That´s a -$14,290 disparity, directly attributable to financial mismanagement.

Add to that an arrangement where the bank´s fees are determined as a percentage of the income on paper investments in the trust and the conflict of interest is clear. It is to the bank´s advantage to neglect diverting funds from investing in paper so they can glean larger fees. Beneficiaries be damned.

In essence a major loss to the beneficiaries on home/trust performance while the bank played games with stocks and bonds, and will now attempt to blame the beneficiaries for running out of funds. How can this be sold to the public as fiduciary responsibility! If it can, and be defended in law and court, then "trust" is a gross misnomer perpetrated by the banking industry and their lawyers, to take advantage of an innocent public market.

Evaluating the bank´s appraisal of the house

Strottman recorded two approaches to arriving at the house´s value: the "cost approach" to quantify replacement expense, and the "sales approach" to compare it to what values the market places on similar homes. The problem in each approach is his axe-mentality, which reveals an amazing hostility. For example, in his depreciation estimate in the cost approach, his axe cut a chunk out that was 87% of the cost-new, and this for concrete block construction that was barely 50 years old. His only significant criticism was that the roof had a leak. The rest of his commentary was stuff like peeling paint, clutter and grass not cut in a long time, needs new rugs. And that last criticism was in spite of the fact that they had hardwood floors that had only one area that needs refinishing. This would assign a value of just under $35,000 to the home, based on the Strottman depreciation axe.

In the sales approach, Strottman again uses his axe in unjustifiable ways. The condition adjustments are outrageous. When I checked the auditor´s estimate of the house-values for Strottman´s selected properties, they range in the $95,000 area so how in the name of mathematical sense could there be an $80,000 deduction for incremental *differences* in condition like average vs poor??? Logically, if one of his choices had been in excellent condition he would have had to deduct more than the value of the house as *difference* in condition, given the scale of his cuts.

His deductions make no sense and suggest that he is axing based on the total price of the property, land included. But land does not depreciate nor is natural landscaping a sign of dereliction. Just the opposite, it´s a sign that the owner is current in the research on landscaping benefits.

And it seemed double-counting to have both quality of construction and condition since the quality of construction would impact the condition so we consulted an appraiser among my contacts online. The alternate appraiser agreed the depreciation deductions were "very high" in the cost approach and suggested that we remind Strottman that real estate refers to those things attached to the property, not clutter nor rugs. On the sales approach, he questioned the validity of the condition deductions on a couple bases. First he noted that "sale 1, at $200,000, and considered ´fair´, is selling for more than #3, which is not only supposedly in better condition but is larger." This would seem to raise the issue of the designations themselves as being in someway invalid, or that the sellers of #3 may have been in a much greater hurry to sell. Secondly "the size of the adjustment amounts should be demonstrated by the market. This means he needs to have paired sales; Sale A = Sale B except for condition (same size, same quality, same bedrooms, same size lot, etc., different condition). The difference in the sales price then reflects the market estimate of how much depreciation there is. This depreciation should relate to a percentage or a rating; poor/fair vs. average."

This last comment is very helpful in dealing with the revision of the evaluation. If we assume conservatively that the paired sales exist somewhere as percents then we can use ballpark values that would fit the spread of possible condition ratings, from excellent to poor, for example stepping from 100% to 20% in 20point intervals. To eliminate the land from the equation, we used the proportion of value in the house in the auditor´s records and applied it to the sale price to get the proportion of the sale price attributable to the house, to which we could apply amended adjustments.

One other suggestion he made was that the square-footage adjustments were usually 50% of the cost-new values so we modified that variable. We also discovered that the floorplan for #1 in the auditor´s records shows that only 1672sf are on the first floor, the remainder apparently in the basement, to add to the puzzles. Although that would seem to intensify the anomoly between #1 and #3, it made the sale price comparison between #1 and #2 closer, since #2 has a 2car garage in its basement, something not reflected in the squarefootage of the home, including the Sayre´s whose garage is vintage 1980s. Since #3 is peculiar on several grounds now we could technically put more weight on the other comps but, conservatively we continue to include it. The resulting revision arrives at a value for the house of $53,000 which together with the midpoint of the land values, namely $130,000, gives a new total appraisal of $183,000. Conservatively, that´s a $58,000 error in the appraisal and an unjustifiable $75,000 loss to Ann Sayre if the bank´s mishandled sale is permitted to happen. If the third comp were eliminated from the approach, the total appraisal rises to $203,000.

What would have been the proper handling of the house in preparation for selling?

But we´re far from done with the home as an investment. Next is marketing that value, finally. Having established a significantly more credible appraisal that supports the merit of the home, and realizing that the house is unique, how would a responsible financial manager prepare it for sale to optimize the value received for the beneficiary?

Any real estate agent or financial publication will list structural/performance concerns that buyers would have as well as presentation features that have demonstrable sale-price paybacks. All of which are recognized as good financial investments pre-sale, and except for the paint, are sensible practice in long-term property value management. Other than keeping the deed in some file cabinet, and issuing automated quarterly reports, plus the court mandated accounting statement every 2 years, what has the bank done for the past 10 years to financially manage this property? If you were the homeowner, that same bank would be advertising a home improvement loan which the expected real estate sale benefits would easily repay, based on general experience. Note that the accumulated costs are quite manageable and nowhere like the devastation of the appraiser´s axe. For 2100 sqft of unique, 50year old home, designed and built by a mechanical engineer to shelter his family and himself.. how could that not be worth the $50,000 in the county´s appraisal. Part of Anderson Township´s history and within a stone´s throw of the soon-to-be bike-hike nature trail. That´s less than $24/sqft. You can´t even get a well-built, new doublewide that size for that price.

Together with the estimate on the value of the land, the asking price for the property would be at least $165,000 or as much as $194,000. And a reputable real estate agent would set the opening asking price slightly higher since the estimation process is always subject to variables and individual criteria on the part of buyers looking for homes. The bank put this asset under sale contract for $108,000 (maybe even only $103,000 since, with information on the sale price filtering from lawyers, it´s not easy to be certain of precision) and that very same bank, namely NBT, thinks they deserve to be paid for their services. Their brazen audacity on top of incompetence boggles the mind.


Lest you think the physical property was the only part of the trust that was mismanaged, let´s discuss Mary-Jane´s part of the trust, the paper and funds. There was a $25,000 life insurance policy, fully paid up, in the trust and according to their own letter, they cashed it in to pay their fees. To replace that policy now would cost over $8,000 according to another life insurance expert, but the bank trustee cashed it in for under $3,500. And they did it over Mary-Jane´s objections. When I consulted the trust officer at another area bank, I was told that this was a violation of protocol to sell an asset for less than it was worth without the approval of the trust´s beneficiary. Since National Bank and Trust has their own life insurance division, they should be expected to know the replacement value of what they disposed of, not to mention that the policy could serve other functions to other trustees.

For example, the Hamilton County Land Conservancy may offer life estates, as we encountered in Butler and Preble counties, to those who donate their land to the Conservancy. Under that arrangement, Ann and Mary-Jane could continue to live in the homestead without further bank fees for the rest of their lives and the land would then be unavailable to developers in perpetuity, becoming forever conserved. It would seem reasonable to expect that there would be similar arrangements for assets like life insurance policies making the trustee the beneficiary. Certainly, actuarially you could estimate a payment stream to equitably access the value in that policy.

The trust officer at the other area bank, in fact, felt that this case was an industry nightmare and wanted to be kept posted. His advice was to check the trust document for clauses stating who had authority to change the trustee but he said, in his opinion, the bank would be anxious to withdraw as trustee, rather than face a lawsuit and publicity. His bank would not have accepted trusteeship of smaller trusts because it´s demonstrably not cost-effective for the beneficiary so taking on the Sayre account was not doing the Sayres a favor, how ever the NBT may portray their efforts. Even at $600/year for real estate only, much less $1,200/year or $2,400/year (at some banks) depending on the other contents of the trust, on the year´s probate requirements for lawyer fees, on the special services of tax preparers, all of which run up the overhead. Out of simple decency, much less fiduciary responsibility, NBT should never have accepted an account they know the bank´s fees will eat up. In offering to manage the trusts, they have misrepresented their ability to perform the service and owe the return of the fees and the termination of the sale, complete with whatever penalties for contract breaking may apply.

Looking at the history of property´s value in 1993 given at the Auditor´s site for the Sayre land and figuring each sister received roughly equivalent trusts to start, the amount the bank could produce from the liquid assets would have been overwhelmed by the bank fees, leaving a net interest rate of under 2% when ordinary CDs paid 4%. For low interest rate years, such accounts would have no interest left after fees. The only profit is for the bank! Just what´s their definition of beneficiary?

And heaven forbid the will´s intended beneficiary should use those liquid funds and deplete the principle that supported nothing but bank fees. And the elder Sayre daughter was living on a minimal fixed income from social security so there was no choice but that the younger sister would live with her or the house would be an albatross, terminally and quickly, even with medicaid and foodstamps. So now the bank proposes to sell the house for Ann´s expenses, and where does that leave Mary-Jane whose trust has effectively been used to extend the viability of Ann´s trust. And unfortunately, the viability of the bank´s fees. Mary-Jane will not benefit from the appreciation in the property values in that trust and Ann will be warehoused in an institution where she has no family, no pets and no one to call 911 in the middle of the night. And she will be burdened with the equivalent of rent besides, on her minimal income from social security. The funds from the sale of the house, being not much more than the original trust funds, will meet the same fate as Mary-Jane´s assets did, only quicker with the warehousing fees. Want to watch the competition between the bank and the warehousing for the remainder of the house proceeds? This is what the bank is arranging.

To undo the catalog of troubles with the property sale, the accumulating bank fees and the cash-in of the life insurance policy would require "making noise", publicly and in court, according to the other trust officer, on the grounds of adopting a grossly inaccurate appraisal, improper marketing of the property, and accepting a lowball offer, even compared to their own appraisal, especially when I told him that Mary-Jane´s lawyer had received a direct offer of $138,000 for the homestead as a result of Mary-Jane´s simple canvassing of her personal acquaintances. Adding to that the effect such turmoil has on Ann´s health with its consequence that she at one point (after fighting it for 6 months) began considering giving up, only highlights the fact that this deal was made under duress on the beneficiary, a clear basis for invalidating any such contract. A contract isn´t legal if one of the parties is not agreeing of their free will. Ann was being railroaded. She and her sister were subjected to insults and browbeating. One trust manager actually said that "he worked for his money" as if the beneficiary of the trust he was charged with servicing was not entitled to the trust´s contents. Certainly this is not what was intended in their mother´s will. Our children share our lives and the burdens we choose to undertake, on our own behalf as well as theirs. It is just and morally right that the assets in her will should go to her children, as intended, not to a flock of predators in sheep´s clothing. How could a bank that bills itself as community-minded perpetrate such an atrocity.

So we decided to focus on the bank. Could it be an isolated incompetent employee? If so, pursuing the issues up the hierarchy might reach someone with authority and a view more similar to others in the industry. The browbeating though was a bad omen since attitude is frequently an indication of corporate culture. We found their website (www.nbtdirect.com) and began noticing some peculiarities. For a bank with 21 branches, they had a lot of vice presidents. About 50, counting all shades from Assistant to Executive, and all the women in the structure were in customer relations or human resources, nor were any of them above Assistant except human resources, not a good sign either. They advertised themselves as "local and community oriented" and they had both an 800# and an email contact. We opted for the 800# and asked for the trust department.

When I said I wanted to ask some questions about the Sayre trust and that I was following up on a lead I´d picked up online, they suggested that I really needed to talk to Douglas Sweet, the AVP of Personal Trusts. But after a puzzling behind the scenes pause, his secretary said that I really should talk to their CEO, someone named Tim Smith. But, alas, Mr Smith also was unavailable, so I left a message saying I was aware of a problem in their trust area. While I was waiting, I called the branch nearest Hamilton County where the Sayre homestead is, to see if any of the recipients of the circulated email had begun to contact them to complain.

Within another half hour, I received a call from the bank´s trust lawyer, Frank Diedrichs, who was defensive when I asked him for the spelling of his name. He was almost immediately on the attack, accusing me of practicing law, of threatening him, and/or the bank. I was asking for confirmation of the bank´s position and whether they were aware of how the case had been handled, including the disparity between their fiduciary responsibility and the apparent acceptance of a lowball offer.

He tried challenging my claim that the house was worth more, sneering about how would I like to live in a place "where the paint was all peeling off the ceiling." When I countered that peeling paint was a handyman´s weekend project, he demanded to know what made me an expert on house performance. His temper was not improving and he tried intimidating and repeatedly interrupting what I was saying which I don´t stand for and talked over the top of his interruptions. He accused me of shouting and I said I wouldn´t have to raise my voice if he didn´t continually interrupt me.

When I got to the issue of improper marketing and not using the resources of the MLS so the property would get decent exposure, he retorted that the bank was "saving their client the real estate commission" to which I countered that his *savings* cost his client $10,000 more than any real estate agent would have charged in fees because the bank had accepted an offer that was significantly under what the bank´s own appraisal had said it was worth. At which point he stumbled momentarily, then tried to recover with the inane response that a real estate fee on $200,000 was double the fee estimate I was using which was totally irrelevant since the bank never had any intention of attempting to sell the home for the auditor´s estimated value. They´d put it under contract for basically the price of the land on the appraisal, not even the price of the land on the auditor´s records.

At which point he threatened to terminate the call saying that we weren´t getting anywhere, to which I responded that in fact I had gotten quite a bit of information, namely that the handling of the case had the approval of the bank´s officers all the way up the ranks, that the bank didn´t want to handle the trust anymore and that they were not yet willing to rescind the sale. And I hung up.

So, it appears that several someones at the bank are not comfortable with the potential of this case. With the evidence of mismanagement, it shouldn´t take much public pressure to pry their hands off the homestead, particularly if we can find a volunteer to act as trustee (their only requirement is to hire a lawyer or maybe a clerk once every 2 years to file the report to the probate court), lay out a financial plan to formalize Ann and Mary-Jane´s budget without the bank´s fees, and find out who the buyer is because that individual needs to know that once their identity becomes public knowledge (which it will at the Auditor when the sale is finalized), their collaboration in evicting two aging Sayre daughters from their ancestral home in order to abscond with roughly a tidy $75,000 profit minimum that rightfully belongs to the Sayres, while one is homeless and the other is warehoused, will definitely have serious karma in the world of public goodwill. Now is that a threat, or just acknowledging reality?

Failing that, will the courts do better than the bank? Not likely since the bank´s intransigience to pressure would signal corruption in the right/wrong places. So we will be left with the task of assuring that no friend or family member ever has the misfortune to depend on NBT. With several thousand of us in Ohio who are already aware of the case -- most in our southwest corner -- that part won´t be that difficult, and some of us have local media connections to heat up the action for those accustomed to leafletting and picketing. A couple snowballs eventually make an avalanche when the snow is deep in the wrong places. It unfortunately will leave Ann and Mary-Jane in the cold, so there will be more to do on that front but helping will be more pleasant than bank confrontations, though we can brainstorm and make the snowballs simple and easily launch them. Unless we can make enough noise where NBT will see the spectre ahead.

NBT should be asked what kind of ship´s captain runs the ship totally aground? This was foreseeable years ago and the trust modified to make this avoidable without casting passengers and cargo overboard. This was basic homeowner-financial/physical management of assets and they were the owner with control of the assets, all of them. This was not the act of a financial god, some stock market quake; nor some random act of nature, some tornado to demolish the house and make it unlivable.

Managing the performance of the trust´s contents was not rocket science. The captain that would ground the ship and not even optimize the salvage is one who knows his fees are obtainable in the wreckage and has officialdom control to assure his own face is saved. It was the passengers´ fault and the cargo was rotten.

The passengers should have bailed. Why? Who is the manager, paid for his services, who had his foot on the use of money? Why, well so the trust manager could play the game another year, or three, for more layers of claimable fees. That´s the sort of trust manager NBT has shown itself to be.

Heaven help the "beneficiary" with the audacity to complain. But no matter, by the time this scheme reaches public notice, they will be conditioned to believe they are derelicts and their pleas will have low credibility in many places. Apparent derelicts have no rights in society, sweep them out of sight!

And when the trust hits ground, it will be the market´s fault for being too weak, and the house´s fault for being too vulnerable (never mind it could have been enhanced to propel the beneficiaries´ finances and lives without dumping it overboard for less than salvage) and it was those ungrateful derelict beneficiaries.

The bank doesn´t have to belatedly rectify the house´s condition, forego their fees for the ride, and allow the beneficiaries the right to choose viable management. The trust has an official probate log, that´s stamped, though it doesn´t give enough of the picture. Divide up the remainder among the vultures, make sure the bank is paid and tar those bothersome beneficiaries. All is as it should be.

Because we, NBT, say so and our lawyers, our PR experts and our customer soothers keep our face absolutely polished. We are the paragons of community-minded corporate citizens. And you are nothing but the public.

We shall see.

For strategy and contacts, tracking results and adding ideas, here´s where to stay informed.


The Sundial..