4. In the case of principal forgiveness, the forgiven part of principal is counted as default balance as well. There is no standard yet for forbearance treatment.

5. The legal process and documentation requirements of foreclosure are complicated and vary from state to state. For an overview of the recent foreclosure documentation issue, see “Transfer and Assignment of Residential Mortgage Loans in the Secondary Mortgage Market.” American Securitization Forum White Paper (November 2010).