3 Exhibit - 3 February 3, 1997 - Letter to Ron Taylor Explaining Craig's psychological problems

February 3. 1997

Ron Taylor

Servicing Center

UC Lending

RE: Loan # 038808828016

Dear Mr. Taylor,

            Thank you for your expression of concern.  In fact, my husband, Craig Franklin, came down with adult on-set diabetes in mid January and this, coupled with a sequence of other family health problems, has caused us some short term problems with keeping our commitments.  Craig was in denial for several weeks after being informed by  our physician and has only in this last week been able to deal with both the diabetes, medication, and other necessary changes. 

            We both deeply regret this and are anxious to come to a keep our obligations - which it appears will be possible in just a few weeks due to assistance from family, friends and the liquidation of some assets, stock and bonds.  I will be able to commit to a schedule of payments to bring us up to date by March 15th.  I am the second owner on the two mortgages you hold and will now be handling this matter. 

            The locations of the two properties in question are:

            2028 Anacapa St.

            Santa Barbara, CA 93105

            9547 Burnet Ave.

            North Hills, CA 91343

            Thank you again for you very kind inquiry.  I am sorry that I have been unable to respond earlier but your letter did not reach my hands until last Saturday. 

Sincerely,