Explanation Letters

[Anonymous]

Just what do those "explanation letters" mean? My wife still has 2 charge offs on her credit file. Both are outside the Statute of LImitations for suit and will age off her credit file some time this month. One of the mortgage banks wants an leter of explanation why they were not paid. Do they really care or is this "banker-ese" for "no loan"? What constitutes a legitimate explanation? The reason is simple - in the 2008 crash we got hit hard. We held it together as long as we could but with her losing her job and my business tanking we paid what was most important - the mortgage and eveything else had to slide. We even took employment outside the country because she couldn't find anything in the good old USA. That was 7 years ago and the FCRA Statute is quickly ticking.

[Anonymous]

Its documenation and if they want it, they want it.  Failure to provide will be a no to the loan.  I read your paragraph and you basically just wrote the explanation so print it out, sign your name and youre done.

its not that hard and why resist?

[Anonymous]

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@Anonymous wrote:

Its documenation and if they want it, they want it.  Failure to provide will be a no to the loan.  I read your paragraph and you basically just wrote the explanation so print it out, sign your name and youre done.

its not that hard and why resist?

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I did this and them the mortgage person simply vanished. Not a word.

[Anonymous]

So call them?

[Anonymous]

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@Anonymous wrote:

So call them?

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I have left meany voice messages and emails. No response to any of them.

[StartingOver10]

Sounds like you are working with either a big box bank type "LO" or someone not very experienced.  Find a lender that has experienced and knowledgeable LO's.  The noobs have a tendancy to dissappear when they don't know the answer to a question IME.  You would be better off with a mortgage banker at a non-bank lender. 

[kc0039]

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@StartingOver10 wrote:

Sounds like you are working with either a big box bank type "LO" or someone not very experienced.  Find a lender that has experienced and knowledgeable LO's.  The noobs have a tendancy to dissappear when they don't know the answer to a question IME.  You would be better off with a mortgage banker at a non-bank lender. 

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OR the LO can be one of those that ask for something and disappear. I hate those LO's

[NC_Mtg_Loaner]

lol when you get the :   " I'm sorry I don't have time to call you Mr. Customer, we are just so busy right now and I wanted to get your document sent into UW so I can get it approved, and make you happy so that I can ask you for referrals of other people you know that are buying or refinancing today"  

Your LO should advise you to always keep your LOXs (Letters of Explanation) short, sweet and complete.   As long as you are truthful and you sign and date the form, you should be good to go.  

Most borrowers just don't understand that the system of originating, processing, underwriting, closing and funding requires lots of people to put their eyes on lots of documents and what you say at the start of the process is going to be verified and things like bank deposits, income and employment can't be held secret--proof and evidence (and LOXs) must be precise.

(Not every LO has time to check on message boards and what not during the day, we are typically very busy returning your calls, answering your questions, fishing, playing golf, entertaining our preferred realtor partners, etc...)

[DallasLoanGuy]

Letter of Explanation (LOE)

1. What happened

2. How did you deal with it

3. What steps have you taken to ensure that it is unlikely to happen again?

Above is the format for the letter.

Typically, the uw just needs it addressed and it doesnt affect the approval.