Explantion letter for FHA loan Shane or Lady Scarlet

[Anonymous]

Is it better to type the explaination letter or hand written or does it even matter? They want an explanation of why I had some collection student loans that were paid after they went into collection. If im honest and say I was unemployed and was unable to pay them will this cause me to get declined? They have since been paid. The collections are probably 3 or 4 years old.

Shane I took your advice and went through BOA FHA they are offering me 6% with like 49.00 a month PMI with my sub 600 fico scores that seems fair. Do forsee the rates going down anytime soon or should I lock?

They also asked if the roof is in good shape. Will the appraiser examine the roof to make sure its in good shape?

[Anonymous]

bump

[Anonymous]

If ypur handwritng is good then handwrite - if not type (it does need to be easily readable).  Tell the truth - it's not like you were taking down 100K/year and ignoring them...being unemployed is 'acceptable' especially since you brought them current ASAP.

[Anonymous]

How long of a letter does this need to be? And do I have to explain each collection in detail on my report? They didnt include a copy of my report they just put a letter of explanation for our medical collections and student loan collections. Can I just write a brief explanation for these?

[Anonymous]

it doesn't have to be a novel...

Dear Mr Underwriter:

Per your request I am providing an explaination of the reason for the medical collections(s) and SL(s) collections appearing on my report.

From Date to date I was unemployed due to (accident, afeter graduation and scare employemnt market for my degree - whatever reason).  My SL matured at this time and because of I was unable to pay due to unemployment they went into default.  When I did become gainfully employed in Date I began payment to the creditors and brought the acoucunts current in date.

The medical collection was for servies provided to me during this same period of unemployment and as you can see they were paid in full as soon as I was able in DATE.

Sincerely

BadCredit Guy

Sorry for the typos - I need a better keybord or one more 'sensitive' to touch

Message Edited by Lady_Scarlet on 02-17-2008 05:59 PM

[Anonymous]

thanks lady scarlett

[ShanetheMortgageMan]

Might want to also point out any re-established credit you've obtained since.. other than that, Lady Scarlet's example looks great.