EXECUTION
      COPY





Navistar
      Financial Corporation


Navistar
      Financial Retail Receivables Corporation


425
      N
      Martingale Road


Suite
      1800


Schaumburg,
      Illinois 60173





Re:
Waiver




Ladies
      and Gentleman:




Please
      refer to (i) the Note Purchase Agreement, dated as of February 16, 2007 (as
      in
      effect on the date hereof, the "Note Purchase
      Agreement") among Navistar Financial Retail Receivables Corporation
      ("NFRRC"), as Seller, Navistar Financial Corporation, individually ("NFC")
      and
      as Servicer, Falcon Asset Securitization Company, LLC, and Park Avenue
      Receivables Company, LLC, as Assignee, collectively, as the Conduit Investor,
      and JP Morgan Chase Bank, National Association, as Agent for the Investors
      and
      (ii) the Servicing Agreement, dated as of February 16, 2007, among NFRRC,
      Navistar Financial 2007-JPM Owner Trust, as Issuer, NFC, as Servicer, and The
      Bank of New York, as Indenture Trustee. The Agent (on behalf of the Conduit
      Investor and the other Investors) is the holder of record of 100% of the
      Floating Rate Asset Backed Note, No. R-1, issued by the Issuer pursuant to
      the
      Indenture. Capitalized terms used but not defined herein have the respective
      meanings ascribed to them (or incorporated by reference in) the Servicing
      Agreement.




The
      Note
      Purchase Agreement or the Servicing Agreement, as applicable, requires, among
      other things, the following:




(i)
      Section 5.02(c) of the Note Purchase Agreement requires that the Servicer
      deliver to the Agent (x) on or before October 31, 2007 (or earlier under certain
      circumstances specified therein), (x) a copy of the annual financial statements
      of the Servicer for the fiscal years October 31 2005 and 2006 (each such
      delivery requirement, an "Annual Financial
      Statement
      DeliveryRequirement") and
      (y)
      on or before October 31, 2007 (or earlier in certain circumstances specified
      therein), a copy of the quarterly financial statements of the Servicer for
      the
      fiscal quarters ended January 31, April 30 and July 31, 2006 and for the fiscal
      quarters ended January 31, April 30, and July 31, 2007 (each such delivery
      requirement in this clause (y), a "QuarterlyFinancial
      Statement Delivery
      Requirement"); and




The
      Servicer expects to fail to satisfy each Annual Financial Statement Delivery
      Requirement, and each Quarterly Financial Statement Delivery
      Requirement.




Additionally,
      the Servicer has notified the Agent that it (i) has failed to timely file its
      annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year
      with the Securities and Exchange Commission in accordance with the Securities
      and Exchange Act of 1934, (ii) has failed to timely file quarterly reports
      on
      Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange
      Commission in accordance with the Securities Exchange Act of 1934, and (iii)
      has
      failed to timely file one or more of its quarterly reports on Form 10-Q for
      fiscal quarters in 2007 with the Securities and Exchange Commission in
      accordance with the Securities and Exchange Act of 1934 (the occurrence of
      any
      such failure, a "Periodic
      ReportingFailure").




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The
      Servicer has requested that the Agent waive any potential Servicer Defaults
      arising from the matters described above. The Agent hereby agrees to waive
      the
      occurrence of any Servicer Defaults to the extent described below.




1.  The
      Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby
      directs the Indenture Trustee to waive, and each of Indenture Trustee, the
      Conduit Investor and the Agent hereby waives, any Servicer Default arising
      solely from the failure to satisfy the Annual Financial Statement Delivery
      Requirements; provided that this waiver shall only remain effective until
      December 31, 2007 unless the Servicer shall have satisfied each Annual Financial
      Statement Delivery Requirement prior to such date.




2.  The
      Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby
      directs the Indenture Trustee to waive, and each of Indenture Trustee, the
      Conduit Investor and the Agent hereby waives, any Servicer Default arising
      solely from the failure to satisfy the Quarterly Financial Statement Delivery
      Requirements; provided that this waiver shall only remain effective until
      December 31, 2007 unless the Servicer shall have satisfied each Quarterly
      Financial Statement Delivery Requirement prior to such date.




3.  The
      Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby
      directs the Indenture Trustee to waive, and each of Indenture Trustee, the
      Conduit Investor and the Agent hereby waives, any Servicer Default or default
      arising under Section 5.05 of the Note Purchase Agreement from any Periodic
      Reporting Failure; provided that this waiver shall only remain effective until
      December 31, 2007 unless the Servicer shall have caused the annual reports
      and
      quarterly reports giving rise to any Periodic Reporting Failure to be filed
      with
      the Securities and Exchange Commission prior to such date.




Each
      of
      the Indenture Trustee, the Conduit Investor and the Agent hereby expressly
      reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer
      Default or default under the Note Purchase Agreement specified in paragraphs
      1,
      2, and 3 above, to the extent that the effectiveness of the waiver of such
      Servicer Default or default under the Note Purchase Agreement shall lapse as
      described therein and (ii) any rights with respect to any breach constituting
      a
      Servicer Default, Potential Servicer Default or default under the Note Purchase
      Agreement existing or arising for any other reason.




This
      waiver may be executed in any number of counterparts and by the different
      parties on separate counterparts, and each such counterpart shall be deemed
      to
      be an original but all such counterparts shall together constitute one and
      the
      same waiver. This waiver shall be a contract made under and governed by the
      internal laws of the State of New York applicable to contracts made and to
      be
      performed entirely within such State.


E-425


IN
      WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed
      and
      delivered by their respective duly authorized officers on the day and year
      first
      above written.


JP
      MORGAN
      CHASE BANK, N.A., as Agent





By:      /s/
      ALAN
      P.
      ENGLISH


Name:      Alan
      P. English


Title:        Vice
      President







FALCON
      ASSET SECURITIZATION


COMPANY,
      LLC,


as
      Conduit
      Investor





By:   JP
      Morgan Chase Bank, N.A., its


its
      attorney-in-fact





By:      /s/
      ALAN
      P.
      ENGLISH


Name:      Alan
      P. English


Title:        Vice
      President








PARK
      AVENUE RECEIVABLES COMPANY


LLC,
      as
      Conduit Investor





By:   JP
      Morgan Chase Bank, N.A., its


its
      attorney-in-fact





By:      /s/
      ALAN
      P.
      ENGLISH


Name:      Alan
      P. English


Title:        Vice
      President








THE
      BANK
      OF NEW YORK, not in its individual


capacity
      but solely as Indenture Trustee





By:/s/
      MICHAEL
      BURACK


Name:    Michael
      Burack


Title:      Assistant
      Treasurer


E-426




Acknowledged
      and Agreed:





NAVISTAR
      FINANCIAL CORPORATION





By:      /s/
      JOHN
      V. MULVANEY,
      SR.


Name:      John
      V. Mulvaney, Sr.


Title:        V.P.
      CFO & Treasurer





NAVISTAR
      FINANCIAL RETAIL RECEIVABLES CORPORATION


By:      /s/
      JOHN
      V. MULVANEY,
      SR.


Name:      John
      V. Mulvaney, Sr.


Title:        V.P.
      CFO & Treasurer






NAVISTAR
      FINANCIAL 2007-JPM OWNER TRUST




By:
      Deutsche Bank Trust Company Delaware, not in its individual capacity, but solely
      as Owner Trustee





By:      /s/
      MICHELE
      HY
      VOON


Name:      Michele
      Hy Voon.


Title:        Attorney-in-Fact




JP
      MORGAN
      CHASE BANK, N.A., as Swap Counterparty


By:      /s/
      ALAN
      P.
      ENGLISH


Name:      Alan
      P. English


Title:        Vice
      President




E-427