Harbor Bancorp & Subsidiaries - Page 21

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          Tetrick, the president of Unified, provided him with excuses,               
          saying that Mr. Tetrick would have to check with Mr. Keefe, who             
          headed the MCFC entities.                                                   
               In the absence of funds, the Whitewater project was not                
          constructed.  In an assignment dated August 4, 1987, Unified                
          assigned its rights under the Ironwood reimbursement note to Far            
          West Savings and Loan Association, which replaced Unified as the            
          construction lender.  SBE issued a new note to Far West Savings,            
          secured by a deed and an assignment of rents.  The deed                     
          identified the Ironwood bonds at issue and stated, in pertinent             
          part:                                                                       

               the proceeds of the Bonds * * * are to be loaned to                    
               Trustor for the purpose of providing construction and                  
               permanent financing for the acquisition of that certain                
               real property situate[d] in the County of Riverside                    
               * * *                                                                  

               The Ironwood project, currently operating under the name               
          Cross Creek Village, was completed in March 1989 with funds                 
          borrowed from Far West Savings and Loan Association.  The                   
          resulting capital construction costs allocated to the Ironwood              
          project were more than 90 percent of the face amount of the                 
          Ironwood bonds.  When they were occupied, 20 percent of the                 
          apartments were occupied by persons of low or moderate income.              
          SBE suffered severe financial reverses as a result of defaulting            
          on these projects, and Mr. Etchegoyen eventually lost his company           
          to his creditors.                                                           




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