topic Re: Credit Inquiry letter of explanation in Mortgage Loans

Credit Inquiry letter of explanation

MamaCat — Thu, 08 Mar 2012 18:56:45 GMT

My husband and I are in the process of getting a mortgage for our first home.

To the best of my knowledge, we are currently "conditionally approved."

However... we are running into a bureaucratic nightmare. We have now written 7 letters for the purpose of "explaining recent credit inquiries." Apparently, the wording we have used is unacceptable, but I can't get a straight answer out of anyone for how to fix it. I called the lender and was told that it is illegal for me to have any contact with them without our mortgage broker on the phone. I asked the mortgage broker how we need to word the letter and he says it is illegal for him to tell me.

Essentially, we shopped around to compare interest rates and fees. We did not accept money as a result of any of the inquiries so far. The latest inquiries are all from the mortgage broker we selected.

Can anyone tell me how to word a letter that explains that in a way that will be acceptable to the lender?

Re: Credit Inquiry letter of explanation

Walt_K — Thu, 08 Mar 2012 18:59:14 GMT

Here is what I used:

I am writing to explain the following inquiries listed on my credit report:

[List of inquiries listing party requesting report and date of inquiry]

Each of these inquiries was for the purpose of shopping for a competitive rate for a mortgage application. No new personal debt was incurred, or credit granted from these inquiries, which is not already listed on my credit report.

You can probably get by with just the last sentence.

Re: Credit Inquiry letter of explanation

chan85 — Thu, 08 Mar 2012 19:45:11 GMT

is a letter of explanation typical? i had some in december because i had to get a new car (totaled mine) and then there is one on some report (tu i think?) for opening a bill me later account with paypal..... wonder if the bill me later would put towards my DTI since it does have a balance?

Re: Credit Inquiry letter of explanation

Walt_K — Thu, 08 Mar 2012 19:47:54 GMT

It is typical, but I don't know how far back they go. I had to explain my mortgage inquiries, but I had an inquiry from late summer last year that they didn't ask me about.

Re: Credit Inquiry letter of explanation

webhopper — Thu, 08 Mar 2012 21:21:06 GMT

Mine is like a table... my broker provided it to me.... The exact wording is:

The reason for my recent inquiries is as follows:

Date Company Reason

9/21/11 CSC I was shopping for mortgage pre-approval. I did not open an account and cancelled all applications.

And it had a place for borrower to sign.

Re: Credit Inquiry letter of explanation

Annaliese — Thu, 08 Mar 2012 21:58:03 GMT

Your LO/lender should provide you that form. We had to do the same thing as well. It's like a waiver or an explanation - we filled the blanks and just wrote the 'shopping for mortgage rates'. Then we signed the paper.