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G'�►I1J <br />61 <br />INESS (Cont'd <br />1. Butler raised various.ques,tions on the program.with Mr. Crighton <br />applying the answers; <br />Q. What is the contractual,relationships among the contractor, <br />Commission, and the homeowner? Is it . similar to the E -7 <br />Project? <br />A. No, not really. We have a loan closing after we get the <br />check from the Federal Reserve Bank'in Chicago, and at <br />the time the homeowner endorses that check over to their <br />escrow I account which Redevelopment will manage, and when <br />the work has been completed and all other contractual ob- <br />ligations have been satisfied, then the claim for the <br />check will be processed. <br />Q. Will be contracts be let for bid? <br />A. They already have been. This loan application contains <br />the lowest bidder. We try to get at least two estimates. <br />Q. What kind of control will the department or staff have <br />over the contractors? Will the contracts be between the <br />homeowners and the contractor? <br />A. No. Three parties. At the loan closing, Mr. Brownell will <br />serve as agent for the Commission. He will sign the contract; <br />the contractor will sign the contract; so will the homeowner. <br />We are acting as third party of the contract. <br />Q. What powers does the contract give to the Commission? <br />A. We act in the interest of the homeowner. The homeowner is <br />project party, and he has no supervisory or managerial re- <br />sponsibility as far as assuring that the contract is complete <br />and what have you. We handle all of that, although the <br />homeowner's responsibility, obviously is to repay the money. <br />Q. Is there a possibility of a recurrence of the problems that <br />have occurred in other Projects on the 312 Loan Programs? <br />A. I would like to think not, but the potential is always there. <br />(The Chair said, "Very aptly put.) We do carefully screen <br />our applicants. <br />Q. How about a performance bond? <br />A. It is not required under Section 312 Loans because the loans <br />are under $10,000; they do.not come under interstate require - <br />ments. <br />ommissioner.Wiggins suggested that we be very sure that the job is <br />ompleted, to both our and the homeowners` satisfaction. In addition, <br />r. Butler stated that it is very important the contractors we are <br />eating with in each of these cases are of known quality, and not get <br />ome of the types we have in the past. <br />- 13 - <br />