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.
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The opinions expressed are mine and they are not to be taken as legal advice.