A recent incident in New Hampshire is a telling indicator of the increasingly fractious and tenuous relationship between bankers and Realtors.

A New Hampshire home mortgage consultant with Wells Fargo Home Mortgage, Inc., sent out a letter dated January 2, 2004, addressing FSBO homeowners to eliminate Realtors by letting Wells Fargo qualify buyer prospects.

Dear HomeOwner:

Don't feel like dealing with realtors? Same here!! I noticed that you are selling your house on your own, electing not to pay outstanding realtor fees! A smart choice I must say but it does come with some nuisances. I would like to help make the process much easier!

Wells Fargo has helped hundreds of 'For Sale By Owners' save money and time by eliminating realtors and prequalifying prospective purchasers of your home. We have accomplished this by putting our Wells Fargo toll-free phone number sign on the property, letting everyone know that the house is on the market. When people call the posted toll free phone number, we prequalify them! If they are willing to meet your asking price and can qualify for the amount, we direct them right back to you! It saves you time by avoiding calls from people who are only shopping. Only serious and qualified buyers will be allowed to contact you.

This costs you nothing; we get paid on the new sale of the house. The Wells Fargo toll free number sign is NO COST to you and is shipped for free also. We only ask you take the two minutes to put it in your front yard. It is as easy as it sounds....

Faster than you can say, "Oops, Wells Fargo did it again," angry Realtors, who got wind of the mass-mailing, were e-mailing the letter all over the country, complaining to Wells Fargo Home Mortgage, Inc. and the National Association of Realtors.

"Our concern was - is this a corporate policy or was this another way for an individual broker to get business?" says Steve Cook, spokesperson for the NAR. "We officially contacted Wells Fargo after we heard from a number of members, and they promptly got us a copy of the letter. Their headquarters didn't endorse the letter."

Cara Heiden, spokesperson for Wells Fargo Home Mortgage, says, "Wells Fargo Home Mortgage maintains a strong working relationship with many real estate professionals. Working together, we provide great value to homebuyers, fulfilling their dreams of home ownership.

"Recently, an employee of our company violated corporate policy by issuing a letter to a small number of prospects that gave the impression Wells Fargo Home Mortgage does not consider Realtors important to our business. This isolated incident clearly does not reflect the views of Wells Fargo Home Mortgage. To the contrary, we could not have become the country's leading mortgage lender without the support of the Realtor community.

"This letter, developed independently by this individual, should not have been distributed and we apologize for the anxiety this issue has caused our valued partners in the real estate community. We have great respect for the valuable services they provide the American homebuyer, and we appreciate the trust Realtors have placed in us. As a result of this unfortunate incident, we are redoubling our efforts to rebuild their trust in us."

The blunder couldn't have come at a worse time. Realtors are fighting big banks like Wells Fargo on at least three major fronts in 2004:

• NAR is pushing to enact the Community Choice in Real Estate Act, H.R. 111/S. 98, that would "prohibit banking conglomerates from taking over the real estate business and ensure that consumers have as many choices as possible when purchasing a home."

• NAR is trying to prevent the Real Estate Settlement Procedures Act (RESPA) from being finalized in its current form in which lenders will be in charge of a single-package closing, making them effectively the HMO's of the real estate world. "NAR supports efforts to improve RESPA, a consumer disclosure law that ensures that the buyer and seller have knowledge of all settlement costs in a real estate transaction, and has long supported transparency and consumer disclosures. However, NAR believes that there are serious flaws with the current proposal and that it would create more problems than it solves."

• NAR is "particularly concerned about the recent regulation by the Office of the Comptroller of the Currency that allows national banks to pre-empt state real estate lending laws and other state financial regulations. This trend could create federal regulation of real estate finance and perhaps also real estate brokerage if it is allowed to continue," says NAR president Walt McDonald.

However macro the political issues are, the fact that a mortgage "consultant" felt it necessary to circumvent Realtors to get business is significant in the micro.

"This traveled all over Realtordom," marvels Cook. "It's the kind of thing that is inflammatory. It was like lighting a forest fire when the forest was dry. It was incendiary."

Remarked Sarasota, Florida Realtor/broker Chris Kernan, "This letter appears to be another attempt by Wells Fargo to alienate the general public from Realtors. A similar letter from Wells Fargo came out three or four years ago. They apologized all over themselves and promised that it would never happen again. It did anyway. I do not feel comfortable referring buyers to a company that has allowed this type of practice to happen time and again."

It's not the first time Wells Fargo employees have let resentful feelings toward Realtors go public.

In 2000, before the dot-com bust, Wells Fargo made a classic online content mistake - filling its site with material to save money, without regard to the impact for readers. Cybergeeks in charge of Wells Fargo Online got permission to reprint stories from sources such as SmartMoney.com that made real estate agents look worse than crooks. "Ten Things Your Broker Won't Tell You" cataloged some of the worst behaviors by real estate agents, which are not standard practice, and would get most agents' licenses suspended or revoked.

Trouble was, these employees weren't in tune with the fact that Wells Fargo, at that time, got about 70 percent of its mortgages from real estate professionals. The company quickly apologized and replaced the SmartMoney story with one that suggests 10 reasons why buyers should hire a Realtor.

So has Wells Fargo Mortgage simply had a communication failure with its brokers, as it did with Wells Fargo Online? Has the message simply not filtered down from upper management that Realtors are not to be denigrated in the pursuit of new business? Or is there an unspoken policy that allows such actions until someone gets caught?

One broker clearly didn't get the memo, but he did get the axe.

According to phone personnel, the mortgage consultant who sent out the letter is no longer with Wells Fargo Mortgage.