MORGAN STANLEY CAPITAL I INC. ABS-15G
Exhibit 99.4 - Schedule 2
| Client Name: | |||||
| Client Project Name: | MSRM 2026-DSC3 | ||||
| Start - End Dates: | 11/18/2025 - 6/1/2026 | ||||
| Deal Loan Count: | 25 | ||||
| Conditions Report 2.0 | |||||
| Loans in Report: | 25 | ||||
| Loans with Conditions: | 14 | ||||
| 4 - Total Active Conditions | |||||
| 4 - Non-Material Conditions | |||||
| 4 - Credit Review Scope | |||||
| 2 - Category: Credit/Mtg History | |||||
| 1 - Category: Legal Documents | |||||
| 1 - Category: LTV/CLTV | |||||
| 30 - Total Satisfied Conditions | |||||
| 25 - Credit Review Scope | |||||
| 5 - Category: Application | |||||
| 2 - Category: Credit/Mtg History | |||||
| 1 - Category: DTI | |||||
| 1 - Category: Income/Employment | |||||
| 10 - Category: Legal Documents | |||||
| 6 - Category: Terms/Guidelines | |||||
| 5 - Property Valuations Review Scope | |||||
| 4 - Category: Property | |||||
| 1 - Category: Value | |||||
| 3 - Total Waived Conditions | |||||
| 2 - Credit Review Scope | |||||
| 2 - Category: LTV/CLTV | |||||
| 1 - Property Valuations Review Scope | |||||
| 1 - Category: Property | |||||
| ©2026 Clayton Services LLC. All rights reserved. Ownership and use of this report is governed by the legal agreement between Clayton and the party for which it was prepared. Any use not expressly authorized by such agreement, including reliance on this report by anyone other than such party, is prohibited. | |||||
| Client Name: | |||
| Client Project Name: | MSRM 2026-DSC3 | ||
| Start - End Dates: | 11/18/2025 - 6/1/2026 | ||
| Deal Loan Count: | 25 | ||
| Conditions Report 2.0 | |||
| Loans in Report: | 25 | ||
| Loans with Conditions: | 14 | ||
| Loan Number | Original Principal Balance | State | Initial Lender ATR/QM Status | Loan Level ATR/QM Status | Initial Securitization Overall Loan Grade | Final Securitization Overall Loan Grade | Initial Securitization Credit Loan Grade | Final Securitization Credit Loan Grade | Initial Securitization Property Valuations Loan Grade | Final Securitization Property Valuations Loan Grade | Initial Securitization Compliance Loan Grade | Final Securitization Compliance Loan Grade | Initial S&P Overall Loan Grade | Final S&P Overall Loan Grade | Initial S&P Credit Loan Grade | Final S&P Credit Loan Grade | Initial S&P Property Valuations Loan Grade | Final S&P Property Valuations Loan Grade | Initial S&P Compliance Loan Grade | Final S&P Compliance Loan Grade | Condition Category | Condition Sub Category | Condition Status | Initial Securitization Condition Grade | Final Securitization Condition Grade | Initial S&P Condition Grade | Final S&P Condition Grade | Condition Code | Condition Description | Condition Material Indicator | Initial Comments | Client/Seller Response Comments | Conclusion Comments | TRID Error Type | Cure Method | Compensating Factors |
| 10284713 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | B | B | B | B | A | A | A | A | B | B | B | B | A | A | A | A | Credit | LTV/CLTV | Waived | B | B | B | B | CRDLTV5736 | LTV Exceeds Guideline Requirement by less than 5% | No | The maximum LTV for a cash out refi is 75%. Loan closed at 79.55% | (No Data) | Exception to go to 80% LTV approved by XXX and in file. | (No Data) | Not Applicable | CFCFS1739: Positive mortgage payment history - XXX Comments: 0 x 30 > 24 months CFCFS1741: Credit score exceeds guidelines - XXX Comments: Qualifying credit score 786 > GL 700 |
| 10284737 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Reserves of 38.69 months PITIA is 32.69 months greater than the 6 months reserves required. CFCFS5269: Minimal use of credit - XXX Comments: Minimal credit utilization ratio of 9.24%. | |||||||||||||||
| 10284742 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | C | B | A | A | C | B | N/A | N/A | C | B | A | A | C | B | N/A | N/A | Property Valuations | Property | Waived | C | B | C | B | PRVAPROP177 | Property Issues Indicated | No | Per guidelines the minimum square footage for any unit is 500. Unit XXX is XXX sf. An exception for the deviation is missing from the loan file. | (No Data) | An exception was approved for the guideline deviation. | (No Data) | Not Applicable | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Qualifying FICO of 792 is 92 points above the 700 required. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Reserves of 58.67 months PITIA is 52.67 months greater than the 6 months reserves required. CFCFS5269: Minimal use of credit - XXX Comments: Minimal credit utilization ratio of 1.73%. |
| 10284742 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | C | B | A | A | C | B | N/A | N/A | C | B | A | A | C | B | N/A | N/A | Property Valuations | Value | Satisfied | A | A | A | B | PRVAVALU5249 | Property Value Not Supported | No | Desk Review outside of allowed variance. Second appraisal obtained. LTV calculated based on lower of the two appraisal values. - Not an exception, just a note. | Full appraisal received | satisfied | Not Applicable | Not Applicable | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Qualifying FICO of 792 is 92 points above the 700 required. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Reserves of 58.67 months PITIA is 52.67 months greater than the 6 months reserves required. CFCFS5269: Minimal use of credit - XXX Comments: Minimal credit utilization ratio of 1.73%. |
| 10325960 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS3834: Borrower does not have any major mortgage related occurrences during the past two years - XXX Comments: Borrower does not have any major mortgage related occurrences during the past two years. CFCFS1737: LTV below guideline requirements - XXX Comments: LTV of 58.46% is 6.54% below the 65% LTV allowed. CFCFS1741: Credit score exceeds guidelines - XXX Comments: Qualifying FICO of 649 is 29 points above the 620 required. | |||||||||||||||
| 10326174 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS1736: Significant time at current residence - XXX Comments: Borrower has resided at same residence for the past 5 years. CFCFS1741: Credit score exceeds guidelines - XXX Comments: 631 credit score exceeds minimum 620 required per guidelines CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 21.34 verified cash reserves exceeds minimum required | |||||||||||||||
| 10007420 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Credit score of 682 exceeds guideline requirement of 620. CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: Consumer credit history 0 x 30 past 24 months. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Post close reserves of $141,814.53 or 102.73 months PITI exceed guideline requirement. | |||||||||||||||
| 10007417 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | B | B | B | B | A | A | N/A | N/A | B | B | B | B | A | A | N/A | N/A | Credit | LTV/CLTV | Active | B | B | B | B | CRDLTV5736 | LTV Exceeds Guideline Requirement by less than 5% | No | Per guidelines, the max LTV for refinances of rural properties is 70. LTV of 73.56 exceeds guidelines. | (No Data) | (No Data) | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Verified reserves of $XXX or 24.85 months PITI reserve exceed required reserves of ($XXX x 3 = $XXX). CFCFS1741: Credit score exceeds guidelines - XXX Comments: Representative score of 712 exceeds guidelines. CFCFS1736: Significant time at current residence - XXX Comments: Borrower resides at their current residence, XXX, for 42 years. |
| 10007418 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS1737: LTV below guideline requirements - XXX Comments: LTV of 73.61 is below guideline requirement max of 80. CFCFS1741: Credit score exceeds guidelines - XXX Comments: Representative score of 756 exceeds guideline requirement of 620. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Verified reserves of $XXX or 89.97 months PITI reserve exceed required reserves of ($XXX x 3 = $XXX). | |||||||||||||||
| 10007352 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | A | A | D | A | N/A | N/A | D | A | A | A | D | A | N/A | N/A | Property Valuations | Property | Satisfied | D | A | D | A | PRVAPROP132 | Missing HOA Certificate/Questionnaire | No | Provide HOA Certificate/Questionnaire. | XXXX and XXXX Lender questionnaire missingXXXX exception satisfied | XXXX exception satisfied | (No Data) | Not Applicable | CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: XXX months credit history exceeds guidelines. CFCFS2860: Good credit history - XXX Comments: Guarantor demonstrates good credit history. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: XX + months reserves exceeds guidelines. |
| 10101368 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | Credit | Application | Satisfied | D | A | D | A | CRDAPP3822 | Missing or incomplete documentation related to citizenship/residency | No | Missing Proof of Borrower 2 XXX XXX Status Documents. | 1.16.2026-Client's response: XXXCopy of Bwr2's green card provided. Please clear finding.1.16.2026-XXX's response: Received the Green Card for the borrower, exception is satisfied. | 1.16.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 51.37 months of reserves exceeds guideline requirements of 3 months. CFCFS1737: LTV below guideline requirements - XXX Comments: 76.5% LTV for Subject Property is below guideline max LTV of 80% CFCFS1741: Credit score exceeds guidelines - XXX Comments: Median Fico Score 796 > 176 points above guideline program minimum of 620. |
| 10101195 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | D | A | N/A | N/A | D | A | D | A | D | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL1819 | Estimated HUD-1 in File, Missing Final HUD-1 | No | Provide final hud-1 | 1.13.2026-Client's response: January 12th 2026, 4:33:52 pmFSS provided, please clear finding.1.13.2026-XXX's response: Received the Final HUD1, exception is satisfied. | 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 104 Months Reserves CFCFS2860: Good credit history - XXX Comments: Good Credit History |
| 10101195 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | D | A | N/A | N/A | D | A | D | A | D | A | N/A | N/A | Property Valuations | Property | Satisfied | D | A | D | A | PRVAPROP132 | Missing HOA Certificate/Questionnaire | No | Missing Condo Docs/Condo Questionnaire | 1.6.26 Hi XXX - No Doc uploaded.1.13.2026-Client's response January 12th 2026, 4:35:12 pmdocument uploaded1.13.2026: XXX's response: Received the HOA Questionnaire, exception is satisfied. | 1.6.26 exception remains. 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 104 Months Reserves CFCFS2860: Good credit history - XXX Comments: Good Credit History |
| 10101183 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Credit | Credit/Mtg History | Active | B | B | B | B | CRDCRMH193 | Length of mortgage/rental history in file does not meet guideline requirement | No | Provide 12 months canceled checks for the mortgage payments to XXX. | (No Data) | (No Data) | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 10 Months Reserves CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months reporting |
| 10101183 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL1819 | Estimated HUD-1 in File, Missing Final HUD-1 | No | Please provide Final HUD-1 | 1.13.20026-Client's response: January 12th 2026, 4:26:48 pmFSS provided, please clear finding.1.13.2026-XXX's response: Received the Final HUD1, exception is satisfied. | 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 10 Months Reserves CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months reporting |
| 10101183 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Property Valuations | Property | Satisfied | D | A | D | A | PRVAPROP132 | Missing HOA Certificate/Questionnaire | No | Missing All Condo Documents including Condo Questionnaire | 1.13.2026-Client's response: January 5th 2026, 2:58:53 pmCopy of HOA cert provided, please clear finding.1.13.2026-XXX's response: Received the HOA Questionnaire, exception is satisfied. | 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 10 Months Reserves CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months reporting |
| 10101196 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Credit | Credit/Mtg History | Active | B | B | B | B | CRDCRMH193 | Length of mortgage/rental history in file does not meet guideline requirement | No | Provide 12 months canceled checks for the mortgage payments to XXX | (No Data) | (No Data) | (No Data) | Not Applicable | CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months positive Mortgage History |
| 10101196 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Credit | Legal Documents | Active | B | B | B | B | CRDLGL988 | Loan File is Missing or Contains Insufficient Documentation for Basic Review | No | Provide Cash Out Letter. | (No Data) | (No Data) | (No Data) | Not Applicable | CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months positive Mortgage History |
| 10101196 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL1819 | Estimated HUD-1 in File, Missing Final HUD-1 | No | Please provide Final HUD-1 | 1.13.2026-Client's response: January 13th 2026, 12:39:21 pmfss for review1.13.2026-XXX's response: Received the Final HUD1, exception is satisfied. | 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months positive Mortgage History |
| 10101196 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | Property Valuations | Property | Satisfied | D | A | D | A | PRVAPROP132 | Missing HOA Certificate/Questionnaire | No | Provide HOA Certificate/Questionnaire. | 1.13.2026-Client's response: January 12th 2026, 6:55:24 pmcondo cert for review1.13.2026-XXX's response: Received the HOA Questionnaire, exception satisfied. | 1.13.2026-Exception satisfied. | (No Data) | Not Applicable | CFCFS2860: Good credit history - XXX Comments: Good Credit History CFCFS1742: Consumer credit history exceeds guidelines - XXX Comments: 300+ Months reporting positive CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: 69+ Months positive Mortgage History |
| 10200480 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | CFCFS5269: Minimal use of credit - XXX Comments: Credit Utilization is 3.61%. | |||||||||||||||
| 10200481 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | CFCFS5269: Minimal use of credit - XXX Comments: Borrower has low credit utilization of 3.61%. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Borrower has 9 months Reserves. | |||||||||||||||
| 10256794 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 801. CFCFS1737: LTV below guideline requirements - XXX Comments: LTV is 70%. Max allowed LTV is 75%. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Guidelines specify reserves required for 3 months ($5,510.79). Total reserves verified in the amount of $36,293.78 (19 months). | |||||||||||||||
| 10200459 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL100 | Legal document incorrect or incomplete | No | The closing disclosure and first payment letter indicates the loan does not have a prepayment penalty; however, the note and mortgage have a prepayment penalty addendum/rider. | Received updated FPL and CD | Satisfied. | (No Data) | Not Applicable | CFCFS1740: Mortgage payment history exceeds guidelines - XXX Comments: No mortgage late payments in the last 84 months. CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 771. |
| 10217427 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Guidelines specify reserves required for 3 months (XXX). Total reserves verified in the amount of $XXX. (51 Months). CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 763. CFCFS1737: LTV below guideline requirements - XXX Comments: LTV is 70%. Max allowed LTV is 75%. | |||||||||||||||
| 10262962 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL100 | Legal document incorrect or incomplete | No | The business purpose certification was not in the file. | Received business purpose cert | Satisfied. | (No Data) | Not Applicable | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 810. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Guidelines specify reserves required is 12 months for first time investors. Total reserves verified in the amount of $231,288.58 (186 months). |
| 10262962 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | Credit | Terms/Guidelines | Satisfied | C | A | C | A | CRDTER3122 | Loan documents do not meet guideline requirements | No | Missing documentation to support EIN for XXX | Received EIN for XXX | Satisfied, | (No Data) | Not Applicable | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 810. CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Guidelines specify reserves required is 12 months for first time investors. Total reserves verified in the amount of $231,288.58 (186 months). |
| 10262963 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | C | A | C | A | A | A | A | A | C | A | C | A | A | A | A | A | Credit | Terms/Guidelines | Satisfied | C | A | C | A | CRDTER4238 | Business entity does not meet guidelines | No | The business purpose certification was not in the file. | Received business purpose cert | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 161.03 months of cash reserves. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Application | Satisfied | D | A | D | A | CRDAPP227 | Application Not Signed by Co-Borrower | No | Missing signed loan application | Received loan application , borrower auth and disclosure as fully completed loan application. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Application | Satisfied | D | A | D | A | CRDAPP3312 | One or more Applications in file are incomplete | No | Missing signed loan application | Received loan application , borrower auth and disclosure as fully completed loan application. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Credit/Mtg History | Satisfied | C | A | C | A | CRDCRMH193 | Length of mortgage/rental history in file does not meet guideline requirement | No | 12 month mortgage history or property report(showing free and clear ) for the borrowers primary residence XXX was not in the loan file. It is noted that The XXX report shows a private mortgage with XXX. | Received property report for the borrowers primary. The borrower is not the current owner. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Income/Employment | Satisfied | D | A | D | A | CRDINC3204 | Income Documentation Missing | No | According to guidelines, when the current lease is being used by new owners documentation showing the transfer of deposits for the first month rent or current rent is required. The current lease for subject was not in the loan file. Per the appraiser the current lease amts are $1615,$1075 and $1400. The reviewer used 120% of the lease amt for DSCR calculation. | Using rents from the appraiser with 120%. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL100 | Legal document incorrect or incomplete | No | Missing sales contract addendum. Contract expired as of XXX. The subject loan close XXX. | Accepted Seller response | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL4033 | Missing Legal Document(s) | No | The business entity docs for XXX ( EIN- tax id number), and cert of good standing were not in the loan file. | Received EIN number | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL988 | Loan File is Missing or Contains Insufficient Documentation for Basic Review | No | Missing first payment letter. | Received signed FPL | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | LTV/CLTV | Waived | C | B | C | B | CRDLTV3026 | LTV Exceeds Guideline Requirement by at least 5%, but less than 10% | No | Max LTV is 75% when DSCR is less than 1. DSCR is 0.823. Lender used the higher market rent to qualify with a DSCR of 1.124 | Received exception request and approval Received exception request and approval allowing the use of the market rent. | Waived | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10263002 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | Credit | Terms/Guidelines | Satisfied | D | A | D | A | CRDTER146 | Missing lender's loan approval/underwriting form | No | The 1008 /loan approval with DSCR calculation was not in the loan file. | Received term sheet and disclosure accepted as loan approval | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: The borrower has 116 months reserves after closing. |
| 10262999 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Application | Satisfied | C | A | C | A | CRDAPP161 | Application is Non-FNMA Form | No | The signed 1003 form with dob, ssn , primary address ,loan amt, etc is not included in the loan file. | Term sheets signature now approved to be accepted as the loan application , Until online application can be updated. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 137.54 months of cash reserves. |
| 10262999 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Credit/Mtg History | Satisfied | B | A | B | A | CRDCRMH193 | Length of mortgage/rental history in file does not meet guideline requirement | No | 12 months mortgage history or property report reflecting free and clear for the last 12 months on the borrowers primary residence XXX was not in the loan file. It is noted that the XXX XXX report reflects a private mortgage lien with XXX. | Received rent free ltr and property report for the borrower primary residence. The property is not in the borrowers name. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 137.54 months of cash reserves. |
| 10262999 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Legal Documents | Satisfied | C | A | C | A | CRDLGL4767 | Extension Agreement is incomplete | No | The sales contract addendum or ext was not in the loan file. The addendum in file goes through XXX but the subject loan closed XXX | While the last contract addendum in the file reflects an expiration date of XXX, the Buyer and Seller mutually agreed to proceed to closing on XXX, without executing an additional extension addendum. There were no changes to the purchase price, material terms, or conditions of the transaction. Outside of scope. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 137.54 months of cash reserves. |
| 10262999 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Terms/Guidelines | Satisfied | C | A | C | A | CRDTER4238 | Business entity does not meet guidelines | No | The loan closed in an LLC. XXX but file is missing support documents EIN Tax ID for the LLC. | Received EIN number | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 137.54 months of cash reserves. |
| 10262999 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Terms/Guidelines | Satisfied | D | A | D | A | CRDTER146 | Missing lender's loan approval/underwriting form | No | The loan approval /1008 was not in the loan file. | Term sheet now approved to be accepted as the loan approval. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 137.54 months of cash reserves. |
| 10263000 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Application | Satisfied | D | A | D | A | CRDAPP155 | Application Missing | No | The signed loan application with DOB, SSN is missing from the loan file. | Signed loan application ,term sheet and borrower disclosure are being accepted as the 1003. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 124 months reserves exceeds minimum reserve requirement by more than 6 months |
| 10263000 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | DTI | Satisfied | D | A | D | A | CRDDTI2540 | Missing verification of some or all components of non-subject PITI | No | The 12 month VOM or property report, data verify or title search( if owned free and clear) for XXX the borrowers primary residence was not in the loan file. It is noted the XXX shows a private mortgage with XXX | Received rent free letter and property report. The primary is not in the name of the borrower. | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 124 months reserves exceeds minimum reserve requirement by more than 6 months |
| 10263000 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Legal Documents | Satisfied | D | A | D | A | CRDLGL4033 | Missing Legal Document(s) | No | The sale contract addendum is missing. The original contract dated XXX stated the closing shall occur before 60 days after the effective date XXX and an addtl 30 days by paying addtl 35,000 non refundable ext fee XXX. The contract extension was not in the loan file. The subject closed XXX outside of the 60 days and the addtl 30 permitted by the original agreement. | Accepted seller response. | Satisfied | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 124 months reserves exceeds minimum reserve requirement by more than 6 months |
| 10263000 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Credit | Terms/Guidelines | Satisfied | D | A | D | A | CRDTER146 | Missing lender's loan approval/underwriting form | No | Missing the loan approval /1008. | Received disclosure sheet and terms sheet accepted as loan approval | Satisfied. | (No Data) | Not Applicable | CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: 124 months reserves exceeds minimum reserve requirement by more than 6 months |
| 10298556 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | CFCFS1741: Credit score exceeds guidelines - XXX Comments: Guidelines require min score of 700. Mid fico score 789 CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: Guidelines specify reserves required for 3 months ($5,026.56). Total reserves verified in the amount of $463,142.70 (276 months). CFCFS1737: LTV below guideline requirements - XXX Comments: LTV is 70%. Max allowed LTV is 80%. | |||||||||||||||
| 10313457 | XXXXXX | XXXXXX | (No Data) | ATR/QM: Exempt | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | CFCFS1736: Significant time at current residence - XXX Comments: 6.4 years current residence time CFCFS1731: Verified cash reserves exceed guidelines - XXX Comments: PITIA reserves above minimum by 6 months or higher |
| Client Name: | ||||
| Client Project Name: | MSRM 2026-DSC3 | |||
| Start - End Dates: | 11/18/2025 - 6/1/2026 | |||
| Deal Loan Count: | 25 | |||
| Conditions Report 2.0 | ||||
| Loans in Report: | 25 | |||
| Loans with Conditions: | 14 | |||
| Loan Number | Lender Application Date | Broker Application Date | Initial Securitization Overall Loan Grade | Final Securitization Overall Loan Grade | Initial Securitization Credit Loan Grade | Final Securitization Credit Loan Grade | Initial Securitization Property Valuations Loan Grade | Final Securitization Property Valuations Loan Grade | Initial Securitization Compliance Loan Grade | Final Securitization Compliance Loan Grade | Initial S&P Overall Loan Grade | Final S&P Overall Loan Grade | Initial S&P Credit Loan Grade | Final S&P Credit Loan Grade | Initial S&P Property Valuations Loan Grade | Final S&P Property Valuations Loan Grade | Initial S&P Compliance Loan Grade | Final S&P Compliance Loan Grade | Did Lender Acknowledge Exception at Origination |
| 10284713 | XXXXXX | XXXXXX | B | B | B | B | A | A | A | A | B | B | B | B | A | A | A | A | Yes |
| 10284737 | XXXXXX | XXXXXX | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | Not Applicable |
| 10284742 | XXXXXX | XXXXXX | C | B | A | A | C | B | N/A | N/A | C | B | A | A | C | B | N/A | N/A | Not Applicable |
| 10325960 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | Not Applicable |
| 10326174 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | Not Applicable |
| 10007420 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | Not Applicable |
| 10007417 | XXXXXX | XXXXXX | B | B | B | B | A | A | N/A | N/A | B | B | B | B | A | A | N/A | N/A | No |
| 10007418 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | No |
| 10007352 | XXXXXX | XXXXXX | D | A | A | A | D | A | N/A | N/A | D | A | A | A | D | A | N/A | N/A | Not Applicable |
| 10101368 | XXXXXX | XXXXXX | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | No |
| 10101195 | XXXXXX | XXXXXX | D | A | D | A | D | A | N/A | N/A | D | A | D | A | D | A | N/A | N/A | No |
| 10101183 | XXXXXX | XXXXXX | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | No |
| 10101196 | XXXXXX | XXXXXX | D | B | D | B | D | A | N/A | N/A | D | B | D | B | D | A | N/A | N/A | No |
| 10200480 | XXXXXX | XXXXXX | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | No |
| 10200481 | XXXXXX | XXXXXX | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | Not Applicable |
| 10256794 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | No |
| 10200459 | XXXXXX | XXXXXX | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | No |
| 10217427 | XXXXXX | XXXXXX | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | No |
| 10262962 | XXXXXX | XXXXXX | D | A | D | A | A | A | A | A | D | A | D | A | A | A | A | A | No |
| 10262963 | XXXXXX | XXXXXX | C | A | C | A | A | A | A | A | C | A | C | A | A | A | A | A | No |
| 10263002 | XXXXXX | XXXXXX | D | B | D | B | A | A | N/A | N/A | D | B | D | B | A | A | N/A | N/A | No |
| 10262999 | XXXXXX | XXXXXX | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | No |
| 10263000 | XXXXXX | XXXXXX | D | A | D | A | A | A | N/A | N/A | D | A | D | A | A | A | N/A | N/A | Not Applicable |
| 10298556 | XXXXXX | XXXXXX | A | A | A | A | A | A | N/A | N/A | A | A | A | A | A | A | N/A | N/A | No |
| 10313457 | XXXXXX | XXXXXX | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | A | Not Applicable |