1. TOTAL SCORE CARD (AUS Approve/Eligible)- HANDLING OF COLLECTIONS AND DISPUTED ACCOUNTS (REF ML 2013-25) Collections Accounts IFANDTHEN Approve/ Accept the cumulative outstanding balance of all collections of all borrowers is less than $2,000 the underwriter is not required to consider or evaluate collection accounts the cumulative outstanding balance of all collections of all borrowers is equal to or greater than $2,000 the underwriter must include monthly payments in the borrower’s DTI ratio for accounts that will remain open subsequent to closing NOTES:  Accounts of a non-purchasing spouse in a community property state are included in the cumulative balance  Medical Collections and Medical Charge-Offs are excluded, no resolution required Disputed Derogatory Accounts IFANDTHEN Approve/ Accept the total outstanding balance of all disputed derogatory credit accounts (excluding medical), is less than $1,000 a “refer” manual downgrade underwrite is not required disputed derogatory credit accounts (excluding medical) have an aggregate balance equal to or in excess of $1,000 downgrade to “refer” manual underwrite NOTES:  Non-derogatory disputed accounts are excluded from the $1,000 cumulative total  Disputed derogatory credit accounts resulting from identity theft, credit card theft, or unauthorized use, etc. AND disputed derogatory credit accounts from a non-purchasing spouse (community property state) are not included, “refer” downgrade not required  Disputed derogatory credit accounts are defined as: disputed charge off accounts; disputed collection accounts; disputed accounts with late payments in the last 24 months  Judgments and Liens Refer to 4155, no changes to guidance FHA Job Aid― Handling of Collections, Judgment & Disputed Accounts Total Scorecard Approve & Manual Underwriting WBC- FHA Matrix Handling of Collections, Judgment & Disputed Accounts Total Scorecard Approve & Manual Underwriting V1 01.29.2016

2. MANUAL UNDERWRITING-HANDLING OF COLLECTIONS AND DISPUTED ACCOUNTS (REF ML 2013-24) Credit Analysis of Collections and Judgments Collections Accounts IFANDTHEN Referthe total outstanding balance of all collection accounts for all borrowers is equal to or greater than $2,000  Payoff at COE, or  Document payment arrangement and include in DTI If  Lack of payment arrangement‒5% of the outstanding balance will be used in DTI the total outstanding balance of all collections of all borrowers is less than $2,000 No change to FHA guidance, refer to FHA 4155 NOTES:  Collection accounts of a non-purchasing spouse in a community property state are included in the cumulative balance (unless excluded under state law)  Medical Collections and Medical Charge-Offs are excluded, no resolution required  The borrower must provide a letter of explanation with supporting documentation for each outstanding collection account Judgments IFANDTHEN Referborrower is unable to Pay off at COE  Document payment arrangement with creditor  Provide Copy of Agreement  3 Months payments, with no lates & include in DTI (pre-payment to meet 3 month requirement is prohibited) NOTE: all items above apply-no exceptions Borrower will Pay Off at COEDocument sufficient funds to close, from acceptable source NOTE:  Judgments of a non-purchasing spouse in a community property state must be paid in full, or meet the exception guidance for judgments above, unless excluded by state law V1 01.29.2016 WBC- FHA Matrix Handling of Collections, Judgment & Disputed Accounts Total Scorecard Approve & Manual Underwriting