I would argue that on a residential mortgage product, which is by nature secured credit.
I agree 100% but ahkcompliance gives no indication what type of credit is being applied for. They only refer to "insufficient collateral" which could imply the borrower is trying to borrow $25,000 on a $10,000 car. Or I have seen way too many times where the applicant applied for unsecured credit and the loan officer tried to deny it for insufficient collateral when no collateral was offered.
The opinions expressed are mine and they are not to be taken as legal advice.