A chargeback is a process initiated outside of IRESE, in which a Real Estate Note payment is canceled and request for a refund on that payment is posted. Because IRESE imposes a waiting period on incoming payments of 4 business days from the initiation of the payment request, payment failures and cancellations that occur within 4 business days of payment initiation have no impact on the investor's account balance.

Beyond the built-in 4 business day waiting period, however, payees have up to 60 days to request a chargeback on their Real Estate Note payments. IRESE will endeavor to contest chargebacks where appropriate, although the status of the payment will be marked as delinquent at time the chargeback is requested.

If a chargeback is processed successfully between 4 and 60 days after the payment was initiated:

• The full amount of the chargeback will be withdrawn from participating investors' accounts. If this causes an investor to have a negative cash balance, then the account balance will appear negative.
• IRESE servicing fees will be refunded to the investor commensurate with the amount of the chargeback.
• The amount of the chargeback will begin accruing interest again in the Real Estate Note balance.
• Applicable late fees will be assessed to the payee based on the effect of the chargeback on the payee's payment status.