Letters of Explanation

[Anonymous]

Hi FICO Mortgage Forum,

I havent posted in a while but I have been readinig and learning from all of your experiences. Congratulations on your new homes!!!

Please advise your thoughts on letters of explanations - Hubby and I had a rough patch between 2009 and 2014 and that is when the baddies that are on my credit occurred. They are all paid and closed. The Lender I am working with asked for a letter of explanation and I just wanted to know how much detail do we go into.

Will a high level explanation of what was going on in our lives with details as to what happened with each baddie suffice? Is that too much to put?

Please advise

HFM

[Anonymous]

Straight to the point highlighting only the pertinent information. If more information is needed, They will surely ask for it. This is from my experience only...

[Anonymous]

---

@Anonymous wrote:

Hi FICO Mortgage Forum,

I havent posted in a while but I have been readinig and learning from all of your experiences. Congratulations on your new homes!!!

Please advise your thoughts on letters of explanations - Hubby and I had a rough patch between 2009 and 2014 and that is when the baddies that are on my credit occurred. They are all paid and closed. The Lender I am working with asked for a letter of explanation and I just wanted to know how much detail do we go into.

Will a high level explanation of what was going on in our lives with details as to what happened with each baddie suffice? Is that too much to put?

Please advise

HFM

---

HI and congrats on getting your mortgage!!

I went through LOEs when I purchased my first home (on my own after hubby passed away) and they are really simple...don't stress!!

Sample: (late payments)

To Whom it My Concern

ref: 30 day late payment on Capitol One, acct number 1234-5678-9102-1234

On 2 Dec 2015, my account went 30 days late, this was not a normal occurrence in our financial lives as you can tell by previous payments.  We happened to be going through (insert whatever), and since then we have made sure that all of our payments have been made on time.

Sincerely

Mr & Mrs XYZ

another sample: (for excessive inquires..I had to do this one)

To Whom it May Concern

ref:  Credit Inquiry for Bank of Loan

On 20 Dec 2015 I applied for credit but was not given any. We at this time have no intentions of applying for any additional credit

Sincerely

Mr & Mrs XYZ

and another sample (no tax returns..this is another one I had to do):

To Whom it My Concern

ref: Federal Income Tax Filings

Due to my income being non-taxable I am not required to file Federal Tax Returns, enclosed is a copy of the letter provided by the Internal Revenue Service.

Thank You

Mrs XYZ 

The letters do not have to be long and drawn out, it seemed to me the underwriters just needed something to put in their files to prove I had been asked about and replied. My mortgage was a total of 28 days from app to close and LOEs were faxed back (always good option) the day they were asked for.

Good Luck

[Anonymous]

Awesome!!! Thanks for the quick replies and thanks for the examples :-)

HFM

[Anonymous]

Your welcome!

Just don't "group" them, each account will need it's own letter and when you type them up just change account name and number if the same reason applies

[Anonymous]

Just a side note...

I was extremely tempted to send out the following just to see if they were really read..but in the end I didn't...lol

To Whom it May Concern

ref: Credit Inquiry 12 Dec 2015, Victoria's Secret

On 12 Dec 2015, after drinking lots of brown liquor and feeling a little lonely I decided to apply for a Victoria's Secret Credit Card online.  There is an very handsome man that is single down the street. Even though I might be thought of as a "cougar" I don't really look my age. Anywho I pushed that button and was really hoping to get the credit line so I could buy some sexy underthings to entice Mr Goodlooking for some extra Christmas cheer.   I guess that Victoria's Secret had more sense then I did at that moment because it was denied.

I promise that in the future before I apply for anything I will put away any lustful desires and brown liquor.

Sincerely

Mrs XYZ

[StartingOver10]

^^^LMAO....one of the best tongue in cheek LOX I have ever seen 

[Anonymous]

I'm self-employed and have had to write about 6 LOE's so far in the process. Each one I just was as direct, factual and informative as possible. No issues so far. 

[Anonymous]

I guess I was lucky. I just had to write a few words in the far right column to explain my recent inquiries (all for competing lenders except the HP for opening my NFCU account in Feb) on a form with the inquiries listed out for me and then sign and date. Also a letter to explain my CLI in Feb on my QS1/QS card (they offered, I accepted even though I almost always PIF - the exception most recently being the AF prior to converting). 

Good explanation for the VS inquiry. Probably more truthful than most things they read and entertaining to boot!