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<br />.. <br /> <br />. <br /> <br />..,'~ <br /> <br />PROCEDURE INFORMATION <br />File Name: Late Charges on Loan Payments <br />File location: C:\Procedures <br />FOlTTlat: MSWord <br />Prepared by: J ,So lIIian <br />Date Updated: 5/4/98 <br /> <br />PROCEDURES <br />CONSTRUCTION FUND SECTION <br />CONTRACT ADMINISTRATION <br /> <br />Procedure Title: Late Charges on Loan Payments <br /> <br />This procedure will address certain issues regarding the late charge that was added to <br />the promissory note on March 1998, specifically, the terms of the late charge, notifying <br />the borrower of the payment due date and applicability of the late charge, tracking the <br />information on the information sheet, determining the date of receipt of the payment, <br />notification to the Borrower of how its payment was applied, and waiving the late charge. <br /> <br />LATE CHARGE TERMS. <br /> <br />For most loan contracts completed after April 1, 1998, the promissory note will contain a <br />clause that states that for loan payments received 15 calendar days after the due date, <br />the Borrower must include a late charge in the amount of 5% of the annual payment. <br /> <br />The promissory note also includes the language that all payments will be applied first to <br />the late charge, if any, then to accrued interest, and then to reduce the principal amount. <br /> <br />REMINDER LETTER. <br /> <br />The reminder letter sent to the Borrower 30 days in advance of its payment due date <br />should include the statement "If payment is not received by Xdate (the borrower's <br />payment due date + 15 calendar days), a late charge of 5% ($X) will be assessed to your <br />account. If you anticipate any problems with making your annual payment, please contact <br />So-And-So of the CWCB at least ten (10) days prior to the due date to discuss the <br />situation and make altemative arrangements." <br /> <br />INFORMATION SHEET. <br /> <br />The information sheet for the borrower should include the due date, the late charge date, <br />and the amount of the late charge. <br /> <br />DETERMINING THE DATE OF PAYMENT. <br /> <br />The date of the payment will be based on the postmark of the envelope containing the <br />payment. If not available, the date of payment shall be 3 days prior to the CWCB date <br />stamp placed on the envelope. <br /> <br />EXAMPLE: CWCB date stamp is Monday, October 1. The date of payment would be <br />based on 3 business days prior to October 1 (Sunday 9/30 doesn't count, day 1 - <br />