A: A letter of explanation for a mortgage underwriter should explain delinquencies on a person’s credit report, how they happened and the steps being taken to ensure they do not occur in the future. Often, a mortgage underwriter will request a letter of explanation in order to validate his or her reasons for approving or denying the loan.
Piggyback Loan Lenders How Long Do Credit Inquiries Stay On Your Credit Score Do You Lose Earnest Money If Financing Falls Through Inquiries on your credit report are one of the ways credit scoring companies gauge the risk that you’ll default on new credit obligations. Too many inquiries might mean that you’re taking on too much debt or that you’re in some kind of financial trouble and are looking for credit to help you out. Several inquiries can reduce your credit score.
A letter of explanation is a 100-word letter that sits on file at the three major credit bureaus; TransUnion, Experian and Equifax. This letter then gets sent out to anyone requesting a copy of your credit report, providing context for any negative credit entries.
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Simpler the better. When writing your letter of explanation, the magic formula is to just write a simple explanation, Halladay adds. For instance, tell the underwriter that a snow plow hit your mailbox, and you didn’t get the bill that showed up delinquent on your credit report. That’s all you have to explain.
Again, most letters of explanations are written by loan officers. Letter of explanation is required if borrowers had events below: Bankruptcy. mortgage loan modifications. foreclosure. delinquent credit Payment History. Recent Job Change. Divorce.
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Sample Letter of Explanation for Mortgage What is a Letter of Explanation? A Letter of Explanation (or LOE) is commonly requested by a mortgage lender or underwriter to get specific information from the borrower and complete the loan application process.
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· One last thing is that the letter must be hand signed, you can not send an email, the letter must be printed out, dated and then re-scanned or faxed. Spring Mortgage Broker 26214.
There are three types of conditions an underwriter might call for: * Prior to documents (PTD): these are conditions that must be signed off before.
Underwriter Letter of Explanation? My underwriter is requesting a letter to explain any dergos in the past 24 months. I have two derogs in the past two years but it was due to me not paying the bill.
Reader's Question. I am trying to pre-qualify for a home mortgage loan. I filed a chapter 7 bankruptcy back in 2001. The underwriter wants a letter to explain the.