FHA and VA files under 640 credit score represent near 50% of our defaulting and troubled loans

FHA and VA files under 640 credit score represent near 50% of our defaulting and troubled loans.

After a Risk meeting with Sr. Mgmt we are making the following changes to our FHA and VA guidelines effective today:

1. Fico below 640 will no longer be accepted (We will work out the pipeline that is currently in place). All FHA/VA loans under 640 score must close by October 31^st.

2. Files submitted to setup under 640 score dated 9-3 or after will be rejected, submissions sent to setup

9-2 or before will be worked (620-639 score).

3. Exceptions for FHA/VA files under 640 score will not be granted at this time.

Thank you

Steve Peters

COO/CCO

Gateway Mortgage Group LLC
9/3/2010