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Compensating factors
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Compensating factors are positive factors that a mortgage loan borrower can bring to the table due to variety of reasons such as high debt to income ratios, low credit scores, prior bankruptcy, prior foreclosure, prior deed in lieu of foreclosure, prior short sale, unsatisfied collections, and other negative factors. Example of compensating factors are three to six months reserves, rental verification, low debt to income ratios, documented part time income, overtime income, or bonus income that the borrower has but cannot be used because they do not have two year seasoning and other positive factors that add to the overall mortgage loan borrower's credit and financial profile. Here is an article on compensating factors:

http://gustancho.com/compensating-factors/

 
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