Question-and-Answer Session
Operator
(Operator Instructions)Your first question comes from the line of Matt Snowling from FBR Capital Markets. Please proceed.
Matt Snowling - FBR Capital Markets
Yes. Hi. Good evening. Kenneth, I guess I have two questions. One, given the issues around liquidity and the growing backlog of loans that you need to sell, I guess I am just curious as to why you ended up facilitating so many loans this quarter. Is not it better to preserve cash at this point?
Ken Klipper
Well, we actually, by the nature of the underwriting changes we made. We were trying to turn down volume and as we had a very large portfolio of applications in December and January, the growth rates continue to decline as the months went on in that quarter.
Matt Snowling - FBR Capital Markets
So, should we see that the drop off happen this following quarter in the June quarter?
Ken Klipper
Yes.
Matt Snowling - FBR Capital Markets
Okay. In terms of the announcement to cut $200 million of cost, can you tell us how much of that is really related to the TERI reimbursement fees?
Ken Klipper
Well, it does not relate to the TERI reimbursement fees at all. It is actually all class associated with pure expenses, the people, marketing, professional fees and other expenses.
Matt Snowling - FBR Capital Markets
I mean, do not you have roughly $150 million of cost that you are reimbursed for, from TERI?
Ken Klipper
It is based on what volume you have. So, it is a product of the volume that comes in.
Matt Snowling - FBR Capital Markets
Right, I guess my question is, if you are not working with TERI going forward, are you, the cost that you are taking out has nothing to do with those reimbursed fees, I guess.
Ken Klipper
Correct. What we are doing though understand the way these loans work as the fees that the borrowers pay fund part of the reserve and find operating cost. As we move forward with increased fees, there will be operating cost reimbursement as well as loan loss reserve reimbursement.
Matt Snowling - FBR Capital Markets
Okay. I can follow up later on that.
Peter Tarr
Feel free to do that Matt.
Matt Snowling - FBR Capital Markets
Thanks.
Operator
Your next question comes from the line of Mike Taiano from Sandler O'Neill. Please proceed.
Mike Taiano - Sandler O'Neill
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