As an administrative matter, the fee schedule for residential assistance loans has been reviewed and the following recommendations will be implemented effective January 1, 2008 unless further consideration is specifically requested.  The proposed changes will be incorporated into the 2008 draft budget currently under construction.  It should be noted that all fees have been carefully considered against such factors as origination and servicing requirements, average loan amount, target market profile, residual income potential and external program support.  All fees are collected in lump sum upon loan settlement and may be paid by the borrower, contract agent third party or combination thereof.  No changes in timing of payment are recommended at this time.

H2O                                     Base loan fee remains unchanged at $150, though a nominal processing fee of $50 will be applied whenever H2O is originated in conjunction with third party loan products.  In the past, only the highest applicable fee has been collected.

EHOP                                   Base loan fee remains unchanged at $350, though subject to periodic servicing surcharge, as described below.

Contract Loans                Products targeted to borrowers at or below 80% AMI to be assessed a fee equal to $300 (previously $275), though subject to a periodic servicing surcharge, as described below.

                                             Products targeted to borrowers above 80% AMI to be assessed a fee equal to $350 (previously $275), though subject to a periodic servicing surcharge, as described below.  

Periodic Servicing           Assistance loans that carry a payment deferral provision at least 5 years from the date of origination will not be subject to a servicing surcharge.  EHOP loans will typically fall under this definition unless a predetermined amortization schedule has incorporated into the offering.

                                             Assistance loans that require periodic servicing commencing prior to the 5^th anniversary are subject to a $50 surcharge assessed at the time of loan settlement.

Accounts Receivable      To facilitate efficiencies, FP typically funds residential assistance program loans at closing, submitting a detailed invoice for payment upon close of business at month end.  In most instances, FP is fully reimbursed within 60 days of actual loan closing.  A portion of the application fee is meant to account for the related time value expense; however, there have been instances where full reimbursement does not occur until 90-120 days beyond the funding date.  Effective October 1, 2007, FP will assess a finance charge equal to 4.5% on any such balance more than 30 days beyond the original invoice date.