Loan in Excess of Limits -- How to proceed?

[Guest Beth Handrick]

Preparing annual administration for a client we discovered the client approved a loan to a participant for $49,000 in August 2008. While the participant's account balance would support a loan of that size, a prior loan with an outstanding balance of $7,000 at August 2007 was ignored in calculating the maximum available loan. I understand that this not a self-correction type of prohibited transaction. What should be our steps to help the client clean up this mess? Thanks!

[Guest Sieve]

VCP (Rev. Proc. 2008-50). There is a reduced fee if a loan is the only issue.