A derogatory mark is essentially a long-lasting negative record on your credit report. These marks will likely hurt your ability to qualify for credit or obtain desirable rates, and can typically take seven to ten years to clear from your credit history.
Some examples of especially severe derogatory marks include:
Bankruptcy: This generally means that you have entered into a special legal proceeding to request certain forms of relief from your debt obligations. Because it's a drastic step and one of the most damaging negative records you can have on your credit report, it is usually a last resort for addressing overwhelming debt.
Foreclosure: This generally relates to situations where you have fallen behind on mortgage loan payments and the lender has undergone a legal process to attempt to force a sale of the home used as collateral for the mortgage loan.
Collections: These are accounts that have been reported as sent or sold to a third-party debt collector by the original creditor because of missed payments.
Tax lien: Tax liens may occur when you neglect or fail to pay a tax debt on time. It's important to know that unpaid tax liens may remain on your credit report indefinitely.
Civil judgment: This information usually relates to civil lawsuits which require the payment of damages (for instance, if you lost a civil case or failed to respond to a lawsuit at all).
I would say your Lender is doing a very lousy job in keeping you the client informed as to what is required with an explanation. How will they perform down the road.
The Federal Savings Bank