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Below are examples of acceptable extenuating circumstances. These must be verified and documented.
Conventional: Nonrecurring events beyond the borrower’s control resulting in a sudden significant and prolonged reduction in income or a catastrophic increase in financial obligations.
FHA: Serious illness or death of a wage earner. Divorce and the inability to sell a property due to a job transfer or relocation to another area does not qualify as an acceptable extenuating circumstance.
VA: Unemployment, prolonged strikes, medical bills not covered by insurance, etc. Divorce is not viewed as beyond the control of the borrower and/or spouse.
USDA: Loss of job; delay or reduction in government benefits or loss of income; increased expense due to illness, death, etc. Circumstances surrounding an adverse event must have been temporary, beyond their control, and have been removed and unlikely to re-occur, or was the result of a justifiable dispute or refusal to make full payment because of defective goods or services.