Common use of Credit History Clause in Contracts

Credit History. If the Mortgage is underwritten through DU, and the DU finding is either “Approve/Eligible” or “Approve/Ineligible,” Lender does not need to evaluate the borrower’s credit history as set forth below. For non-DU manual underwriting, or manual underwriting that results from a DU finding of other than “Approve/Eligible” or “Approve/Ineligible,” Lender must evaluate the borrower’s credit history using any one of the four options set forth below: (a) Lender supplements its manual underwriting by obtaining a “representative” credit score on the borrower that is not less than 620. (b) Lender does not request a “representative” credit score on the borrower, but instead underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) an acceptable traditional credit profile (under Part X, Section 304.01 of the Selling Guide), or (2) when the borrower does not have the type of credit that is traditionally reported to a credit repository, an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (3) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in all of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (c) Where Lender requests a “representative” credit score on the borrower, but the borrower has no score due to no credit record with the repository, Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (2) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in both of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (d) Where Lender obtains a “representative” credit score on the borrower, but the score is less than 620, Lender underwrites the Mortgage using any one of the three options set forth below; provided, however, the borrower will not be eligible where eligibility could only be achieved by combining the following options (for example, “extenuating circumstances” may not be used to compensate for deficiencies upon application of the criteria for nontraditional credit history): (1) The borrower has an insufficient traditional credit history (as documented by reason codes showing lack of credit accounts, accounts not opened long enough, or lack of usage as the reasons for the low “representative” credit score), and Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of (aa) an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or

Credit History. If the Mortgage is underwritten through DU, and the DU finding is either “Approve/Eligible” or “Approve/Ineligible,” Lender does not need to evaluate the borrower’s credit history as set forth below. For non-DU manual underwriting, or manual underwriting that results from a DU finding of other than “Approve/Eligible” or “Approve/Ineligible,” Lender must evaluate the borrower’s credit history using any one of the four options set forth below: (a) Lender supplements its manual underwriting by obtaining a “representative” credit score (per the Selling Guide) on the borrower that is not less than 620600. (b) Lender does not request a “representative” credit score on the borrower, but instead underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) of an acceptable traditional credit profile (under Part X, Section 304.01 of the Selling Guide), or (2) when the borrower does not have the type of credit that is traditionally reported to a credit repositoryor if applicable, an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (3) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in all of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (c) Where Lender requests a “representative” credit score on the borrower, but the borrower has no score due to no credit record with the repository, Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) of an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (2) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in both of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (d) Where Lender obtains a “representative” credit score on the borrower, but the score is less than 620600, Lender underwrites the Mortgage using any one of the three options set forth below; provided, however, the borrower will not be eligible where eligibility could only be achieved by combining the following options (for example, “extenuating circumstances” may not be used to compensate for deficiencies upon application of the criteria for nontraditional credit history): (1) The borrower has an insufficient traditional credit history (as documented by reason codes showing lack of credit accounts, accounts not opened long enough, or lack of usage as the reasons for the low “representative” credit score), and Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of (aa) an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide). Provided, orhowever, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (2) Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of an acceptable traditional credit profile (under Part X, Section 304.01 of the Selling Guide). Provided, however, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (3) The borrower’s credit history was heavily influenced by credit deficiencies that were the result of a documented “extenuating circumstance,” and the borrower’s credit history has been reestablished and meets the conditions specified in the Selling Guide for the reestablishment of an acceptable credit history following an “extenuating circumstance” (under Part X, Section 803.02 of the Selling Guide). In no circumstance may a nontraditional credit evaluation be used to offset derogatory credit.

Credit History. If the Mortgage is underwritten through DU, and the DU finding is either “Approve/Eligible” or “Approve/Ineligible,” Lender does not need to evaluate the borrower’s credit history as set forth below. For non-DU manual underwriting, or manual underwriting that results from a DU finding of other than “Approve/Eligible” or “Approve/Ineligible,” Lender must evaluate the borrower’s credit history using any one of the four options set forth below: (a) Lender supplements its manual underwriting by obtaining a “representative” credit score (per the Selling Guide) on the borrower that is not less than 620. (b) Lender does not request a “representative” credit score on the borrower, but instead underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) of an acceptable traditional credit profile (under Part X, Section 304.01 of the Selling Guide), or (2) when the borrower does not have the type of credit that is traditionally reported to a credit repositoryor if applicable, an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (3) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in all of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (c) Where Lender requests a “representative” credit score on the borrower, but the borrower has no score due to no credit record with the repository, Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of: (1) of an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide), or (2) when the borrower has not yet established a credit history or does not have sufficient credit documentation to meet the requirements for nontraditional credit, an acceptable “enhanced credit evaluation” for a nontraditional limited credit profile (“enhanced credit evaluation” for nontraditional limited credit requires both of the following: (i) 12 months rental history with no delinquencies, and (ii) no delinquencies in the past 12 months for other trade lines, if any). Provided, however, in both of these cases, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (d) Where Lender obtains a “representative” credit score on the borrower, but the score is less than 620, Lender underwrites the Mortgage using any one of the three options set forth below; provided, however, the borrower will not be eligible where eligibility could only be achieved by combining the following options (for example, “extenuating circumstances” may not be used to compensate for deficiencies upon application of the criteria for nontraditional credit history): (1) The borrower has an insufficient traditional credit history (as documented by reason codes showing lack of credit accounts, accounts not opened long enough, or lack of usage as the reasons for the low “representative” credit score), and Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of (aa) an acceptable nontraditional credit profile (under Part X, Section 304.02 of the Selling Guide). Provided, orhowever, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (2) Lender underwrites the Mortgage using the underwriting guidelines set forth in the Selling Guide for Community Lending mortgages coupled with the development of an acceptable traditional credit profile (under Part X, Section 304.01 of the Selling Guide). Provided, however, a borrower who has a prior bankruptcy or foreclosure in his or her credit history must have reestablished credit that satisfies the requirements of Part X, Section 803.02 of the Selling Guide. (3) The borrower’s credit history was heavily influenced by credit deficiencies that were the result of a documented “extenuating circumstance,” and the borrower’s credit history has been reestablished and meets the conditions specified in the Selling Guide for the reestablishment of an acceptable credit history following an “extenuating circumstance” (under Part X, Section 803.02 of the Selling Guide). In no circumstance may a nontraditional credit evaluation be used to offset derogatory credit.