Mortgage Banking

Residential Mortgage Lending
The Company employs experienced Mortgage Loan Officers who provide personalized service and valuable guidance throughout the application and closing process. Purchasing a home is one of the most important financial decisions our customers will ever make. The residential mortgage lending group focuses on simplifying the mortgage process and making it possible for each one of our customers to achieve their dream of home ownership.

Homebuyers have access to our more than 425 Mortgage Loan Officers through the Company's nationwide network of offices. Prospective borrowers may meet one-on-one with a Mortgage Loan Officer to pre-qualify for a mortgage loan prior to beginning their home search. Interested homebuyers may also complete a pre-qualification form directly over the Internet by visiting our web site at www.republicbancorp.com. In addition, we have expedited the mortgage approval process by providing our Mortgage Loan Officers with laptop computers to use in the field. This capability adds value to the customer's home buying experience by reducing the time required for loan approvals. Our Mortgage Loan Officers regularly conduct educational seminars for first-time homebuyers seeking to more fully understand the home buying process.

Republic's Mortgage Loan Officers rank among the top lenders in the markets we serve. They are dedicated to building personal relationships with real estate agents and brokers in their communities. Cultivation of these relationships helps strengthen our existing referral programs and permits the development of new ones, thereby supporting loan growth. Most importantly, our Mortgage Loan Officers, along with their dedicated Loan Processors and Closers, are motivated to provide the highest level of personalized service so that customers can receive quick responses to questions, timely loan approvals and efficient closings.

Timothy B. Smith, Vice President, Republic Bancorp Mortgage Inc.;C. Ann Moody, Vice President, Republic Bancorp Mortgage Inc.; Michael G. Taormino, Vice President, Republic Bancorp Mortgage Inc.; Sandra J. Nickol, Senior Vice President, Republic Bancorp Mortgage Inc.

During 1998, the residential mortgage lending team closed a record $6.1 billion in mortgage loans. We reached a record $5.9 billion in retail mortgage loan closings in 1998, an increase of $2.5 billion from 1997. In 1998, the Company closed more than 52,000 mortgage loans.

As a result, Republic ranks as the 21st largest retail mortgage lender in the country. We are also proud to be one of the largest Michigan-based retail mortgage lenders. Truly, we are "Financing the American Dream."

Mortgage Loan Products
Republic offers a variety of mortgage products with flexible terms suitable for homebuyers. Approximately 63% of Republic's mortgage loan closings are conventional mortgage loans underwriten to guidelines permitting their sale directly to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Another 16% represent government loans either guaranteed by the Department of Veterans Affairs (VA) or insured by the Federal Housing Administration (FHA) underwriten to guidelines permitting their conversion into mortgage-backed securities issued by the Government National Mortgage Association. The remaining 21% are comprised of portfolio and jumbo loans.

Republic also offers a variety of residential construction loan products. Our Mortgage Loan Officers work closely with their construction loan customers and their builders to ensure that the construction loan process is a positive and smooth process.

Mortgage Loan Servicing
At December 31, 1998, the Company serviced $2.9 billion in mortgage loans for the benefit of others, representing more than 35,000 loans. Mortgage loans serviced have been originated through our retail bank and mortgage loan production offices or acquired through bulk purchases.

As a loan servicer, Republic performs the servicing function by collecting and remitting loan payments, holding custodial funds for payment of taxes and insurance, counseling delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults, and performing other loan administrative duties. In return, the Company receives a fee from the investor, ranging from 25 to 45 basis points. In addition, the Company retains late fees and other ancillary charges associated with the administration of the mortgage loan servicing portfolio.

Providing outstanding customer service is the main focus of each servicing employee at Republic. This commitment is demonstrated each time an employee speaks with a customer over the phone or processes a transaction that affects a homeowner.