Origination Best Practices

At First Horizon we practice responsible mortgage lending; that means we work closely with you to deliver a suitable and fairly priced loan that benefits both you and First Horizon. In order to help us maintain a consistent practice of responsible mortgage lending we have implemented the Origination Best Practices outlined below. In addition, as a federally-regulated financial services company we are required to adhere to lending standards adopted by our federal regulator, the Office of the Comptroller of Currency (the "OCC"). We also adhere to Fair Lending practices required by our secondary-market investors (those who buy our loans).

We have created a Committee of our Board of Directors that meets periodically to review our origination practices and to make adjustments to our practices as may be necessary or prudent.

Ability to Repay. We will not approve your mortgage loan until we have determined you have the ability and capacity to repay the loan.
Collateral Valuation. We will not make a mortgage loan based solely on foreclosure or liquidation value of your property.
Product Suitability and No Steering. We will use our best efforts to help you select a mortgage product that is suitable for your specific circumstances. We will not direct, or "steer" you to a loan with higher costs rather than to a comparable loan offered with a lower cost for which you could otherwise qualify.
Single Premium Insurance. We will not finance so-called Single Premium Credit Insurance.
Arbitration. We do not include mandatory arbitration clauses in any of our mortgage loan documents.
Loan Flipping. We will not engage in repeat refinancings under circumstances where the relative terms of the new and refinanced loan and the cost of the new loan do not provide you a tangible benefit.
Equity Stripping. We will not engage in repeat refinancings where your equity is depleted as a result of financing excessive fees for the loan or ancillary products.
Refinancing Special Mortgages. If we are aware of specialized or subsidized mortgages that contain terms favorable to you we will not refinance these mortgages unless the refinancing provides you a tangible benefit.
HOEPA Loans. We do not originate mortgage loans defined as "high cost" under the Home Ownership and Equity Protection Act of 1994 ("HOEPA").
Disclosures. We will strive to ensure you are fully aware of the terms and conditions of the selected loan product and we have processes in place to ensure you receive this information in a timely fashion.
Prepayments. We offer you a choice of loans with or without prepayment charges for paying the loan early and will assist you in choosing the option that suits your particular needs. If, for example, you plan to remain in your home for the length of the prepayment period you might benefit from the lower interest rate available if a prepayment option is selected; on the other hand, if you do not anticipate remaining in your home for the length of the prepayment period you may find it beneficial to accept a somewhat higher interest rate in exchange for not selecting the prepayment option.
Personal Information. We do not sell your personal information and have strong internal controls to protect your privacy.
Quality of Assistance. We will give you a written Quality of Assistance Standards detailing the specific assistance we will provide you during the origination process.
Pricing and PMI. Depending on your loan-to-value ratio our secondary market investors may require us to purchase Private Mortgage Insurance ("PMI") to insure them against certain losses if you default on your loan. You, as a customer, are not the insured under a PMI policy and you do not apply for the coverage; however, if PMI is required we will purchase the insurance and pass along the cost of the premium to you without any markup. We do not control the premium the insurance company charges for PMI and do not have any role in determining how the premium is established. The PMI premium may depend, in part, on information the insurance company gathers from a review of your credit report; this means that, depending, in part, on information contained in your credit report (including credit scores), and the insurance company may charge us a higher or lower PMI premium than it would for customers who have different credit scores. While we will attempt to make an initial preliminary good faith estimate of the PMI premium we cannot inform you of the actual charge until the insurance company reviews your individual circumstances and makes an independent determination as to the rate it will charge us for the PMI premiums.
Monitoring and Corrective Action. We routinely monitor our compliance with applicable law and our internal policies and procedures and also monitor the quality and resolution of complaints. We also take appropriate measures to adequately address unintended variations from applicable law and our internal policies and procedures; we also make appropriate adjustments to our policies and procedures as may be necessary or prudent.

We have empowered each of our employees to use their best personal and professional efforts to ensure that we meet these standards and consistently engage in responsible mortgage lending. We recognize, however, that we occasionally make mistakes and we pledge that we will work to promptly correct those mistakes as we become aware of them. You may contact us through a variety of means to discuss any issues or concerns you have and we encourage you to do so. As a federally-regulated financial services company you may also direct any concerns to our federal regulator, the OCC, at the following address:

Comptroller of Currency
Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, Texas 77010

You can reach the OCC Customer Assistance Specialists by calling its toll free number, (800) 613-6743, Monday - Thursday, 9:00 a.m. to 4:00 p.m., Central Time, and on Friday, from 9:00 a.m. to 3:00 p.m., Central Time, or by sending an e-mail to Customer.Assistance@occ.treas.gov.