DESCRIPTION STANDARD A borrower s creditworthiness is based on past and present credit history. The credit history must demonstrate the borrower s ability and willingness to handle financial obligations. The borrower s credit history must meet the following definition of standard credit. Length Credit report must reflect an overall two-year credit history (determined by the oldest open date). Tradelines Minimum 3 tradelines showing on the credit report One currently active account the Date of Last Activity or DLA must reflect activity in the month the credit report was pulled or the previous month. Each tradeline must be opened for a minimum of 6 months and reflect activity in the most recent 24 months (except for the currently active account, the tradelines do not need to be open or active). One alternative credit tradeline may be used supplement the 3 tradeline requirement on loan amounts up to $2,500,000. The alternative credit tradeline may not be used to meet the two-year credit history or currently active account requirements Refer to Non-Traditional Credit Ratings below. OR Minimum 2 tradelines meeting the requirements above if the borrower has an active and satisfactory two-year mortgage or rental payment history. The 24-month rating may consist of a combination of mortgage and/or rental ratings as long as the history is current and reflects the most recent 24 month period. The other tradeline line must be reported on the credit report and have been opened for a minimum of 6 months and reflect activity in the most recent 24 months. Note: The credit report must reflect an overall two-year credit history (determined by the oldest open date). OR 24-Month Mortgage or Rental History No other tradelines required in the last 24 months if following requirements are met: Minimum 5 year credit history reflected on the credit report 5 tradelines reporting activity in the last 5 years Minimum 720 credit score Housing payment shock doesn t exceed 125% (based on the actual payment, not the qualifying payment) No derogatory credit in the past 24 months No history of bankruptcy or foreclosure Loans with non-occupant co-borrowers not eligible for this enhancement Tradeline Notes: Tradelines for debt paid by other parties do not count toward the minimum tradeline requirement. Debts paid by the borrower s business can be counted toward the minimum tradeline requirement if the borrower is 100% owner of the business. Authorized User Accounts See below Credit History Requirements Mortgage History Installment and Revolving Debt No 30-day late mortgage/rental payments in the 12 months prior to the date of the application. Installment and revolving debt payments - during the 12 months prior to the date of the application, no more than two 30-day lates and no 60-day lates. Timeshares - May be considered under installment debt guidelines. If account is in default, refer to collection/charge-off guidelines, below. Broker-Glance Credit Page 1 of 9 09/22/2017
STANDARD Foreclosure Deed-in-Lieu of Foreclosure Foreclosure - No foreclosures in the 7 years prior to the date of application (or 3 years with extenuating circumstances) with re-established credit. Deed-in-Lieu of Foreclosure No deed-in-lieu of foreclosure in the last 4 years (or 2 years with extenuating circumstances) with re-established credit. Foreclosure within a Bankruptcy Bankruptcy Notice of Default Short Sale/Short Payoffs/Short Refinances Collections Major Derogatory Credit Liens and Judgments Delinquent Property Taxes Extenuating Circumstances Refer to section below. Re-established Credit Refer to section below. If the foreclosure occurred within a bankruptcy, the foreclosure seasoning requirement above apply. Chapter 13 Discharged 2 years prior to the date of application with reestablished credit. Chapter 7 or Chapter 11 Discharged 4 years prior to the date of application (or 2 years with extenuating circumstances) with re-established credit. Extenuating Circumstances Refer to section below. Re-established Credit Refer to section below. If documentation in the loan file (credit report, title report, etc.) indicates that a Notice of Default (NOD) was filed against the borrower, but the NOD did not result in a foreclosure, the following seasoning requirements with reestablished credit must be met: Borrower Brought Account Current 4 years Resulted in a Short Sale 4 years NOD due to Extenuating Circumstances 2 years NOD is an Isolated Derogatory Occurrence 2 years Short Sale/Short Payoffs 4 years seasoning (or 2 years with extenuating circumstances) with re-established credit. Refer to RLU 404-22 Short Sales/Short Payoff/Short Refinances for additional information. Note: Even if the above short sale seasoning requirements are met, if applicants remained in the property after the short sale, the loan must be escalated to an underwriting manager or supervisor for review. These transactions will be considered on a case-by-case basis. If the applicants moved out of the property after the short sale and have been out of the property for at least four years, escalation is not required. Short Refinances A short refinance occurs when an applicant requests to refinance their current mortgage with Union Bank with the expectation that their current lender will accept a payoff of less than the amount owed. Short refinances are ineligible. No collections filed (opened) in the last 12 months prior to the date of application totaling over $1,000. If there are multiple unpaid collections or an unpaid collection with a significant balance regardless of the open date the underwriter must review the explanation to determine if the unpaid collections represent major derogatory credit. Balances, collectively up to $1,000, that do not adversely affect the Bank's lien position are not required to be paid. Medical collection accounts can be excluded from this total unless the underwriter deems them to be excessive or if they could adversely affect the Bank s lien position. Underwriting manager or supervisor approval is required if the medical collections exceed $10,000. No unpaid charge-offs, garnishments, attachments, or repossessions totaling over $1,000 in the 12 months prior to the date of application. Balances, collectively up to $1,000, that do not adversely affect the Bank's lien position are not required to be paid. No more than 2 judgments or liens totaling over $5,000. Judgments and liens over 2 years old that have been paid can be excluded from this consideration. If there are no more than 2 open judgments and/or liens with a combined amount of $5,000 or less, that do not adversely affect the Bank's lien position, they are not required to be paid. If the Preliminary title report reflects the most recent half of property taxes as delinquent and the underwriter determines that it is an isolated occurrence Broker-Glance Credit Page 2 of 9 09/22/2017
STANDARD Other Credit History Guidelines and not likely to recur, the credit can be considered as acceptable. The underwriter would address this on the loan review. No accounts may be currently past due Isolated Derogatory Credit - When the credit report reflects only one occurrence, including a recent mortgage late, and the underwriter determines that it is an isolated occurrence, not likely to recur, and is minor in relation to the overall credit history, the credit can be acceptable. The underwriter would address this on the loan review. Tax Repayment Plans - As long as the borrower does not have a history of tax liens or other major derogatory credit, a voluntary tax repayment plan is not considered derogatory credit and may remain open if certain requirements are met. Refer to Broker Glance Key UW Guidelines. Borrower Party to a Lawsuit - If the loan application (Declarations Section), preliminary title report, credit report or other information contained in the loan file indicates the borrower is a party to a lawsuit, additional documentation must be obtained so that the underwriter can determine potential negative impact. The documentation provided by the borrower or borrower s attorney must provide details of the lawsuit and the terms must not indicate a potential ongoing liability or severe negative impact to the borrower s ability to repay. NON-TRADITIONAL RATINGS Maximum Loan Amounts Number, Type, and Duration of Credit References Documentation Acceptable Sources Non-traditional credit histories are allowed for conforming loan amounts only. 1-unit - $424,100 2-units - $543,000 3-units - $656,300 4-units - $815,650 One non-traditional rating can be used to supplement a credit history for loan amounts up to $2,500,000 for borrowers who use credit minimally and just need a recent rating to meet standard credit criteria. Number of Alternative Credit References 4 Type/Duration Rental Rating 24 months Other References 12 months At the discretion of the underwriter, if the loan is determined to be an acceptable risk, then in instances where the borrower lacks a 2 year housing payment history, one of the alternate 4 references must cover a most recent 2 year period. Rental Rating A Verification of Rent (VOR) covering a two-year period is required. If the rating is from a landlord/private party, it must be supported by copies of cancelled checks (or other evidence of timely payments such as bank statements) for the 12 month period preceding the application date. If the rental rating is provided by a professional management company, copies of cancelled checks are not required if the company can be validated by underwriting. Large Recognizable Institutions/Utility Companies An original credit reference from the company is preferred or the most recent 12 months consecutive statements. At the underwriter s discretion, canceled checks or bank statements can be requested to support the payment history. Other References Provide an original credit reference letter or 12 months consecutive statements AND canceled checks or bank statements. Utilities Utilities include electricity, water, gas, telephone & cable television service (if the utilities are not included in the rental housing payment). Utility Bills Exception If a utility bill doesn't include the names of both/all borrowers, it can still be used as one of the references as long as the file has documentation to show that the borrower has lived in the same home that used the utility with the person named on the bill for the length of time the account has been opened. NOTE: at least one of the borrowers must be named on the utility bill. Other Acceptable Sources - The following sources are acceptable when regularly scheduled payments are required (monthly, quarterly, etc.): Medical Insurance Coverage (excluding payroll deductions) Automobile Insurance Life Insurance Policies (excluding payroll deductions) Household or Renter s insurance Payments to local stores (department, furniture, appliance or Broker-Glance Credit Page 3 of 9 09/22/2017
NON-TRADITIONAL RATINGS RENTAL RATINGS/VOR MORTGAGE RATINGS/VOM SCORE Unacceptable Sources specialty stores) Payment of school tuition, child care, medical bills Savings history (must be supported by bank statements showing at least a 12 month history of periodic deposits, at least quarterly, and a growing account balance) Unacceptable Sources the following would not be acceptable as alternate sources of credit: Contributions to religious or non-profit organizations Savings/retirement contributions made by an employer or other third party Informal loans from private parties A Verification of Rent (VOR) covering a two-year period is required (12 months history is an acceptable rating if not being utilized to meet a tradeline for alternative credit). Professional Management Company If the rental rating is provided by a professional management company, copies of cancelled checks are not required if the company can be validated by underwriting. Private Party Landlord Borrower must provide cancelled checks (or other evidence of timely payment such as bank statements) for the 12 month period preceding the application date. All mortgages belonging to the borrower(s) must be rated for the 12 months preceding the loan application. If not showing on the credit report, one of the following must be obtained Verification of Mortgage (VOM) with canceled checks (front and back), VOM with 12 months bank statements (a computer-generated mortgage history can be substituted for a VOM). For private party mortgages, cancelled checks or banks statements are required. VOMs and/or computer-generated mortgage histories are acceptable only if the mortgage is being serviced by an institutional lender. Validating the Credit Score - For loan transactions that require a minimum credit score, the credit score must be considered valid. Valid credit score must meet the following requirements: Review All The credit score provided by each credit repository must be reviewed to determine if it is Credit Scores Length of Credit History Tradelines Inaccurate Information in Credit Report considered to be a valid credit score. The credit report must reflect an overall history of at least two years (determined by the oldest open date). Minimum 3 tradelines showing on the credit report One currently active account (defined as the Last Active Date being the same or the previous month in which the credit report was pulled). Each tradeline must be opened for a minimum of 6 months (except for the currently active account, these tradelines do not need to be open or active and do not need to reflect activity in the last 24 months). Notes Tradelines for debt paid by other parties do not count toward the minimum tradeline requirement. Debts paid by the borrower s business can be counted toward the minimum tradeline requirement if the borrower is 100% owner of the business. If the credit reporting agency reports that the repository file used to create a credit score contains inaccurate information about a borrower's credit history, the underwriter should determine if the inaccuracy is significant and, if so, should disregard that credit score. Minor discrepancies in the balances owed or payment amounts on open accounts are typically not significant nor predictive of the credit score. Examples of inaccurate credit information that may significantly affect the usefulness of a credit score include: Account delinquencies reported in error. Public information (e.g., bankruptcy, foreclosure, judgment or collection) not belonging to the borrower. One or more tradelines not belonging to the borrower. Social security number not belonging to the borrower. When the credit score is invalid due to any of the above reasons, the credit score cannot be used where a minimum credit score is required. Broker-Glance Credit Page 4 of 9 09/22/2017
SCORE Selecting the Credit Score Review the valid credit scores for each of the borrower Three Valid Credit Scores Select the middle score. If two of the three scores are identical, one of the identical scores is considered the middle score. Two Valid Credit Scores Select the lower of the two scores. Select the lowest score of all borrowers to determine the qualifying credit score for the loan transaction. One Valid Credit Score or No Credit Score Reported A minimum of 2 valid credit score is required. If the borrower(s) only have one valid credit score or does not have any credit scores being reported, the borrower(s) will not be eligible for loan transactions that have minimum credit score requirements. CO-BORROWER RE-ESTABLISHED The acceptable credit reputation of one borrower cannot be used to offset the unacceptable credit reputation of another. However, at the underwriter s discretion, if one of the borrowers is not necessary for qualification, because the borrower provides: No qualifying income; Contributes no separate assets toward borrower funds or reserves for qualifying, Any separate liability is included in the qualifying ratios. And the co-borrower meeting the following credit history: No history of bankruptcy, foreclosures, short-sales, or deed-in-lieu Max 2x30, 1x60 in last 12 months on other credit No major derog (90+ lates) in the last 24 months Medical collections allowed; underwriting manager or supervisor approval is required if medical collections exceed $10,000. Then, the underwriter may disregard the co-borrower's credit reputation when underwriting the collective credit reputation as long as the Bank's lien is not impaired. NOTE: The primary borrower s credit score will be used as the representative credit score After a bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale, short payoff, or Notice of Default, in order to meet the definition for an acceptable, re-established credit history, the following criteria must be met: Seasoning Requirements: Foreclosure 7 years (3 years with extenuating circumstance) Bankruptcy Chapter 7 or 11 4 years (2 years with extenuating circumstances) Chapter 13 2 years Refer to Standard Credit above for additional seasoning requirements. Re-Established Credit Time Frame Acceptable credit history must have been re-established for a minimum of 4 years. Exceptions to this policy may be considered under the following conditions: A shorter elapsed time of 2 years is considered to be an acceptable interval for re-establishing a credit record when the adverse action was a Chapter 13 bankruptcy. Two years is also considered an acceptable interval for re-establishment of credit, if the adverse action related to a Chapter 7, 11, or 13 bankruptcy, as long as the borrower can satisfactorily document that the bankruptcy related action resulted from extenuating circumstances (reference RLU 404-10 - Extenuating Circumstances.) Note Although the seasoning requirement for a foreclosure is 7 years, the look back period for reestablished credit is 4 years. Evidence of Re-Established Credit Whether a bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale, short payoff, or Notice of Default occurred due to extenuating circumstances or financial mismanagement, the following requirements must be met: Credit has been re-established for a minimum of 24 months All accounts are current. Borrower has a minimum of 4 tradelines or 4 non-credit payment references, each with a minimum 6 month history. For information on non-credit payment references, refer to Non-Traditional Credit Ratings above. Note: Loan Amounts > $424,100 to $2.5 million Borrowers must have a minimum of 2 re-established tradelines showing on their credit report. Up to two tradelines may be non-credit references to meet reestablished credit tradeline requirements. Each of borrower's minimum payment references has been active within the most recent 24 month period. If the derogatory credit included tradeline credit, then the borrower has re-established at least one tradeline credit. One of the payment references is housing related. The housing-related reference is not required when the borrower meets the following criteria: o Borrower has 4 re-established traditional tradelines showing on the credit report, each with a Broker-Glance Credit Page 5 of 9 09/22/2017
RE-ESTABLISHED DISPUTED ACCOUNTS minimum 12 month history. o One of the accounts has a significant balance with a payment (automobile payment or larger credit card) o Borrower is making minimum 5% down payment from his or her own funds (includes EOM loans) If the borrower has monthly rent payments that weren't reported to the credit repositories, documentation must show that rent payments were timely during the most recent 12 months. There are no new public records for bankruptcy, foreclosure, judgments, tax liens or collections. No 60 day late payments No more than two 30 day lates. No housing payments past due during the applicable time frame. Evidence that the credit history does not contain multiple revolving accounts with high balances-to-limits or high overall utilization of revolving credit. When disputed tradelines are present, a letter of explanation from the borrower is required to determine the nature of the dispute. If the disputed account does not belong to the borrower and this is supported by documentation provided by the borrower or Union Bank s credit report provider, no further action is necessary since the credit score/credit history would be accurate. If the borrower is disputing the accuracy of the credit history, the dispute must be resolved or removed and a new credit report must be obtained reflecting that the tradelines are no longer in dispute. To remove the dispute, the borrower will need to contact each bureau directly. Once the borrower provides confirmation the dispute has been removed, along with the borrower s authorization to re-pull credit and incur the cost of a new report, Union Bank will order a new credit report. TransUnion: 800-916-8800 Experian: 714-830-7000 Equifax: 800-203-7843 The credit score from the new credit report must be used for qualification and pricing purposes. Dispute Treatment To determine if a dispute can remain or needs to be removed: Mortgages: If the account has a current balance or if Date of Last Activity is within 4 years of the application date: Obtain a credit supplement to evidence dispute has been removed If no derog reporting on account and no minimum credit score required to qualify then a new credit report is not required. If there is a derog reporting on the account and the credit meets standard credit guidelines and a minimum score is required, then a new credit report must be obtained. If the mortgage trade line reports Date of Last Activity > 4 years prior to application date: Obtain a property profile to ensure no NOD or Foreclosure Review DataVerify to ensure no other concerns No further action required if both property profile and DV are clear (If the results indicate a foreclosure, follow foreclosure related guidelines.) If the mortgage trade line reports Date of Last Activity > 7 years prior to application date, no further action is required. Installment or Lease Accounts: If the account is current with balance or Date of Last Activity is within two years of the application date: Obtain a credit supplement to evidence dispute has been removed. If derog reported and it meets standard credit guidelines and no minimum score is required, a new credit report is not required. If a minimum score is required, obtain a new credit report. If no derog reported and no minimum score is required, a new credit report is not required. Revolving Accounts: If the current balance is $10,000 or less and the rest of the credit history meets standard guidelines, the dispute does not need to be removed. If the current balance is greater than $10,000: If the applicant has verified liquid assets (in addition to the required reserves) in the amount of the account balance, no further action is required. If the applicant does not have verified liquid assets as noted above, obtain a credit supplement to evidence Broker-Glance Credit Page 6 of 9 09/22/2017
DISPUTED ACCOUNTS EXPLANATION DOCUMENTATION dispute has been removed and refer to the next steps: o If derog reported, it meets standard credit guidelines and no minimum score is required, a new credit report is not required. If a minimum score is required, a new credit report is required. o If no derog reported and no minimum score is required, a new credit report is not required. Collections Collections with balances, collectively up to $1,000, that do not adversely affect the Bank's lien position do not have to be resolved or removed. Medical collection accounts that are in dispute do not have to be resolved or removed unless the underwriter deems them to be excessive or if they could adversely affect the Bank s lien position. Underwriting manager or supervisor approval is required if the medical collections exceed $5,000. Authorized User Accounts with Current balance greater than $10,000 If documentation (bank statements) supports borrower is making the payments then follow guidelines above for revolving accounts. If documentation (most recent three months statements bank statements from the owner of the account) show other party making payment then no further action is required. Multiple accounts reporting a dispute: If disputes are reported on two accounts with a cumulative current balance greater than $10,000 and a minimum score is needed to qualify, then the disputes will need to be removed and new credit report obtained. If three or more accounts are disputed regardless of cumulative balances follow the steps below: If no credit score is required obtain credit supplements to verify dispute removed and each account history meets standard credit guidelines. If a credit score is required a new credit report is required to support disputes removed. As described below, the loan file must contain documentation explaining the reason(s) for either of the following when identified by the credit reporting agencies on the credit report. Addresses When there are addresses identified by the credit reporting agencies on the credit report that do not coincide with the address history listed on the loan application, obtain a written and signed explanation from the borrower. Any discrepancy noted in the last 5 years should be specifically addressed. At the underwriter s discretion, discrepancies older than 5 years may also need to be addressed. Authorized User Accounts When the owner of an authorized user account is not a borrower on the subject loan, the borrower must provide a written and signed explanation that includes the name and relationship of the owner of the authorized user account(s). Authorized user accounts that have been closed for 24 months or longer do not need to be addressed. Bankruptcy A letter of explanation signed by the borrower is required for bankruptcies, regardless of age. If not clearly identified on the credit report, copies of the bankruptcy petition, schedule of debts and discharge are required. Evidence to support any reported extenuating circumstances must be provided, if applicable. The credit report must reflect the acceptable re-establishment of credit. Date of Birth When the date of birth on the credit report does not coincide with the date(s) listed on the loan application or elsewhere in the file, a written and signed explanation from the borrower is required. NOTE: It is acceptable for the month and year to be reported without the day on the credit report. When the month & year reported on the credit report are consistent with the month and year provided on the application, no further explanation is required. However, if the day was listed as 1 with the correct month and year on the credit report for one of the credit bureaus it will be acceptable if the other 2 are the same and contain consistent information provided on the application, no further explanation is required. Employers When the employers listed on the credit report do not coincide with the employer(s) history listed on the loan application or elsewhere in the file, obtain a written and signed explanation from the borrower. Any discrepancy noted in the last five years should be specifically addressed. At the underwriter s discretion, discrepancies old than 5 years may also need to be addressed. Foreclosure, Deeds in Lieu, Short Sales, Mortgage/Rent Lates Obtain a written and signed explanation from the borrower for the loan file and provide documentation to support any extenuating circumstances. Inquiries When there are inquiries appearing on the credit report that are dated within 90 days preceding the application date, a written and signed explanation obtained from the borrower must be in file. Any new debt must also be explained. If additional credit was granted, the unpaid balance and repayment terms must be documented, and the payment included in the total monthly debt. Names When there are names that do not coincide with the name(s) on the application, obtain a written and signed explanation from the borrower. Recent Derogatory Credit Any derogatory credit item within the most recent two-year period. Significant Undisclosed Debt Shown on the credit report, but not disclosed on the loan application, regardless of age. Social Security Number When there are social security numbers on the credit report that do not coincide with the number(s) on the application, obtain a written and signed explanation from the borrower and include a signed Social Security Number Validation form located in the Corporate Documents section of the Broker Platform. Broker-Glance Credit Page 7 of 9 09/22/2017
AUTHORIZED USER ACCOUNTS AUTHORIZED USER ACCOUNTS FROZEN INACCURATE INFORMATION / SCORE UPDATE EXTENUATING CIRCUMSTANCE Authorized User Accounts - When an account is reflected on the credit report as an authorized user account that account may or may not be considered in the applicant's credit history. If the owner of the account is also a borrower on the loan or if it can be documented that the borrower has been making the payments on an authorized user account for the last 12 months, the account can be considered as part of the borrower s credit history and can be used to meet the minimum tradeline requirements. If the owner of the account is not also a borrower or if the borrower has not been making the payments on the account, the underwriter must determine whether or not the authorized user account(s) has had a significant effect on the borrower s credit history. The following factors should be taken into consideration: The number of authorized user accounts, especially when there is more than one The relationship of the owner of the account to the borrower the borrower must provide an explanation of the relationship of the owner of any authorized user account. If the owner is not a family member or closely related person, the account may be part of a credit renting or piggybacking scheme The number of individual and joint accounts established by the borrower relative to the number of authorized user accounts. This includes reviewing the amount of time an authorized user account has been opened relative to other credit established by the borrower. If the underwriter determines that the authorized user account(s) has a significant effect on the borrower s credit history: The loan requires manual underwriting The credit score is not considered valid and the loan is not eligible for any program where a minimum credit score is required Authorized user accounts cannot be used to determine whether minimum credit criteria have been met. Frozen Credit A credit report that references a security freeze is unacceptable. The loan should not be submitted to Union Bank until after the freeze has been lifted. Inaccurate Credit Information/Credit Score Update There may be inaccurate information showing on the borrower s credit report that could affect the underwriting decision and/or has a significant impact on the credit score. Union Bank will allow corrections and credit score updates for a maximum of two erroneous accounts. Union Bank will not allow credit score updates for changes in account balances. Examples of erroneous accounts include: Account delinquencies reported in error. Public information (e.g. bankruptcy, foreclosure, judgment or collection) not belonging to the borrower. Trade lines not belonging to the borrower. When the credit report includes inaccurate information, a new loan file will need to be submitted to Union Bank once the credit report items have been corrected. The new loan file must include documentation that supports the correct information. Union Bank will review the new loan, the revised credit report generated thru the Broker Platform, and the documentation supporting the corrections. Acceptable Documentation Acceptable documentation includes one of the following: A letter from the credit grantor authorizing correction to its own trade line. The letter must be on company letterhead and match the name as reported on the trade line and include the company s address and phone number. The letter must be specific in its instruction of what is to be updated. A Universal Data Form, signed by the creditor requesting a change to its own trade line. Certified court documents (i.e., release of lien, bankruptcy papers, satisfaction, etc., with a court stamp showing the date recorded at the court house. NOTE: Fees for Credit Score Updates cannot be charged to the borrower. Factors which govern the extenuating circumstances definition include: Non-recurring or isolated circumstances beyond the borrower s control. Situations (e.g., long term illness, loss of employment due to factory shutdown, etc.) causing significant reduction in income and/or increased expenses, rendering the borrower unable to repay obligations as agreed on a continuous basis. Documentation When it is determined that the borrower experienced an extenuating circumstance and that the borrower s credit standing is acceptable, additional documentation is required and must be included in the loan file. The extenuating circumstance and re-establishment of credit must be documented as follows: Written statement from the borrower outlining the cause of the financial difficulty which was beyond his or her control, and which indicates that the extenuating circumstance is not on going and is not likely to recur. Documentation from a third party confirming that the events were isolated occurrences that significantly reduced the borrower s income and/or increased expenses, thereby rendering the borrower unable to repay as agreed. Evidence of acceptable credit history prior to the credit problems caused by the extenuating circumstances. Broker-Glance Credit Page 8 of 9 09/22/2017
Evidence that the credit history does not contain multiple revolving accounts with high balances-to-limits or high overall utilization of revolving credit. Evidence that the borrower has re-established an acceptable credit history for at least 2 years (reference Re-established Credit above). EXTENUATING CIRCUMSTANCE NOTE: If this documentation cannot be provided, then extenuating circumstances are not applicable. Recent Derogatory Credit If the credit history includes significant/major derogatory credit within the most recent 2 years, even if it was caused by extenuating circumstances, the borrower's credit reputation cannot be considered acceptable. Broker-Glance Credit Page 9 of 9 09/22/2017