Suppose that you are putting together a loan application to purchase a home. Based on your income and assets, you qualify for a mortgage loan, but just barely. How would you address each of the following situations in reporting your financial position for the loan application? In your post address each of these different situations and IF and HOW you should disclose them to your mortgage lender:

a) You were involved in an auto accident in which you were at fault. There is the possibility that you may have to pay as much as $50,000 as part of a settlement. The issue will not be resolved before the bank processes your mortgage request.