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A letter of explanation (sometimes called an LOE or LOW) is a document requested by mortgage lenders when they want more details about your financial situation. An underwriter may request a letter of explanation if they run into questions about your finances during the mortgage approval process.
Delinquent credit issues is a general statement that refers to any debts, in the past or currently, including any type of loan, credit card, or line of credit with late payments, long-term delinquency, or default. It is stated broadly to cover a range of derogatory credit situations.
Address Discrepancy Letter is a letter of explanation where the borrower clarifies the current residential address and responds to any discrepancy in the address stated in credit report or other documents.
Federal regulations require that lenders prove they have verified your ability to repay the loans they make. A letter of explanation may provide the extra documentation needed to: Clear up any discrepancies on your credit report, like late payments or cosigned loans.
Derogatory is seen as negative to lenders, and can include late payments, collection accounts, bankruptcy, charge-offs and other negative marks on your credit report.
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Most explanation letters are just used as a way to connect the dots, and when thats done the underwriter is satisfied with the information provided. Then they can move forward with underwriting and approving the loan, and the borrower can get the home they were hoping to buy.
Underwriting Letter means the letter agreement dated on or about the date of this Agreement between the Borrower and each of the Underwriters in relation to, among other things, the fees payable under clauses 10.2 and 10.3 and the Commitments.
Dear [recipients name], I write to you today in response to a letter I received from you, dated [insert date], about [insert number] of late payments on my loan from [insert date to date]. I am writing this letter today to explain to you the reasons for my delay.
Relax Dont worry too much about a letter request. All you need to do is look for what they want to verify and then provide an answer. Keep your answer simple and to the point and wait to see if its enough. Dont assume that youre not going to get a loan because an explanation was requested.
Most explanation letters are just used as a way to connect the dots, and when thats done the underwriter is satisfied with the information provided. Then they can move forward with underwriting and approving the loan, and the borrower can get the home they were hoping to buy.

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