Posted on: 30th Jul, 2008 07:32am
A letter of explanation (LOE) may be required at the time of taking out a mortgage loan. In case you made slow payments, late payments or had past dues which are showing up on your credit report, then you may be required to write a LOE. You may be asked by the lender or the underwriter to explain the reasons behind your delinquencies.
A mortgage letter of explanation should be very simple and short. You should explain the reasons behind non-payments or late payments in your own words. The letter must contain brief and categorical description of your own specific individual situation. Underwriter may ask you to explain the reasons behind multiple inquiries on your credit report. Credit report may show multiple credit inquiries because of new credit card, auto loan etc. Whatever be the reasons, you need to explain it properly.
With a LOE, a particular lender gets to know about your specific financial situation in a better way. This in turn helps the lender to speed up or halt the loan process.
A mortgage letter of explanation should be very simple and short. You should explain the reasons behind non-payments or late payments in your own words. The letter must contain brief and categorical description of your own specific individual situation. Underwriter may ask you to explain the reasons behind multiple inquiries on your credit report. Credit report may show multiple credit inquiries because of new credit card, auto loan etc. Whatever be the reasons, you need to explain it properly.
With a LOE, a particular lender gets to know about your specific financial situation in a better way. This in turn helps the lender to speed up or halt the loan process.
my info has been sent to an underwriter and he has now requested why i have a late cc payment on my report well the reason is because i truly forgot it was due and did not get the bill. is that a good enough reason? do you think that will affect whether i get the loan
Hi sbarbee. Welcome to the forum.
So you have not got the bill. Then explain it in the letter and pay the bill ASAP. Hope it will not affect on getting approve for the loan.
Best of luck,
Larry
So you have not got the bill. Then explain it in the letter and pay the bill ASAP. Hope it will not affect on getting approve for the loan.
Best of luck,
Larry
I have to state why I paid it late to bank what would be the proper wording?
linda, "your own words" is by far the best way to put it. actually, a competent loan officer will have letters on hand that ought to fit such a situation, with a simple customization to fit your particular situation.
but if you simply state the facts: you overlooked it, didn't receive the bill, and then you paid it (i assume) as soon as you recognized it was late. is that what happened? if so, just state it that way and you'll satisfy the requirement. don't make it more than it really is, for your own sake.
but if you simply state the facts: you overlooked it, didn't receive the bill, and then you paid it (i assume) as soon as you recognized it was late. is that what happened? if so, just state it that way and you'll satisfy the requirement. don't make it more than it really is, for your own sake.
trying to see where i can find sample letters to the underwriter
Hi Teon,
You can check out the given page in order to get some sample letters that you can provide to the underwriter:
"http://filestreasury.com/?route=search&s=4&query=sample_letters_to_the_underwriter&wmid=89&hl=IN"
Thanks
You can check out the given page in order to get some sample letters that you can provide to the underwriter:
"http://filestreasury.com/?route=search&s=4&query=sample_letters_to_the_underwriter&wmid=89&hl=IN"
Thanks
Teon, as I noted above, you ought to be able to pick the brain of your loan officer and get some ideas as to how to specifically address the issues brought up by your underwriter. Hopefully, you've got a competent loan officer as I mentioned in my earlier post.
depending on a situation, and a copy of a mortgage payment history, writing a letter of explanation, if your notr careful, could actually take the heat off of the mortgage servicer whom may of not applied payments correctly, thru your loan off kilter, and then because you may want a loan so bad, you tell on yourseldf when you shouldnt of, it can hurt your rate, dont let your prior servicer or bank, mess you up, stay on track of what they are doin, for sure, then you nwont have nuthin to worry about later.