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WESTERN BANK EXHIBIT A <br /> Member FDIC Equal Housing Lender t5J <br /> • <br /> February 5, 1998 <br /> Mr. Steve Dorgan <br /> Housing Inspector <br /> City of Mounds View <br /> 2401 Highway 10 <br /> Mounds View, MN 55112-1499 <br /> Dear Steve: <br /> I would like to thank you and Rick Jopke for meedng with us regarding a home improvement loan <br /> program for the residents of Mounds View. Cindy Carlson, Jeanne Kassim and I were interested <br /> in the ideas you presented for improving and stabilizing the housing stock in Mounds View. A free <br /> remodeling counselor is a great idea. As we discussed, in this letter we will outline some possible <br /> ideas for your program and how Western Bank may be involved. <br /> 1. Rate Buydcwn <br /> Western Bank would use current underwriting guidelines and fund home improvement • <br /> loans using your income and other parameters. The City of Mounds View could <br /> compensate Western by several options including keeping money on deposit at a lower <br /> than market rate or by paying a fee per loan to buy dawn the rate. Either, keeping <br /> deposits at Western or paying a fee per loan to buy down the rate, would require some <br /> mathematical calculations to determine the appropriate amount This option would not <br /> involve lending out City of Mounds View money. All loan risk, administration, compliance <br /> with all regulations and collection would be the responsibility of Western. <br /> Basic Program Guidelines <br /> • <br /> • Gross debt to income ratio of 40% (this ratio is determined by dividing the normal <br /> monthly debt by the applicant's gross monthly income). <br /> • Our current rates vary by the amount of equity in the home. In addition, we offer a <br /> • loan program in which we can lend up to $25,000 without regard to equity in the <br /> home. Our current rates range from 7.99% to 12.75%APR and change an a weekly <br /> basis. <br /> • Applicant's should have satisfactory credit and a stable source of income. <br /> • • Applicant's should not have excessive credit card debt. • <br /> • Loan minimum for a mortgage is$5,000. Loan minimum for any other loan is <br /> $^ 000 <br /> • Applicant's would pay normal closing costs which can be financed in the loan. <br /> Typical closing costs for a 325,000 loan would be approximately $195.00. <br /> Note: We can consolidate other debt to accommodate the new home improvement • <br /> payment <br /> • <br /> 663 University Avenue 1740 Rice Street 7035 10th Street Norm 2711 N.E Highway 10 3033 University Avenue S.E. <br /> St.Paul.MN 55104 Maolewootl.MN 55113 Oakaale.MN 55128 Mounds View.MN 55112 Minnnanniic 1A J et <br /> 161717on_R1nn <br />