Entered into a CP Loan with Bank 11 months ago.

The Agreement stated all disbursements were to be made to me and Builder jointly via check.

Disbursement were to be made after Bank received survey and Building Permits and were to be made based upon 100% of the improvements in place.

Found out 6 months after Construction was progressing that Builder never pulled a Building Permit.

Took Builder to Arbitration, he did not show, but 2 bank employees did.

We discovered Bank issued a Draw via wire directly to Builder without our knowledge for over $28K. It was issued on the day of Closing and not disclosed on the HUD 1.

Bank's inspector then certified certain aspects of the house had been completed when in fact they were not. Bank issued 2 more checks to us and Builder for an additional $112K.

We did not know what checks were for, we did not have copy of Inspection Report, but since we trusted Bank we countersigned checks and allowed the Builder to cash them.

When we confronted Builder he refused to obtain permit, filed for Bankruptcy and shortly afterwards put lien on house for $120K.

Bank claims house was 36% complete. An outside Inspector has certified it is only aout 20% complete.

Bank has disbursed funds not in accord the Construction Loan Agreement.

We no longer want the house since it has been exposed to weather since March. Plus the subdivision it was in has had 4 foreclosures. There are only 34 Lots in total in the subdivision.

Does anyone know of any similar cases?