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Underwriter Letter of Explanation?

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Established Contributor

Underwriter Letter of Explanation?

My underwriter is requesting a letter to explain any dergos in the past 24 months.

 

I have two derogs in the past two years but it was due to me not paying the bill. What do I say?  "Umm yea that was charged off because they closed my account because the sky was blue outside and I saw no incentive for me to pay on a closed account"


Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
Message 1 of 10
9 REPLIES 9
Valued Contributor

Re: Underwriter Letter of Explanation?

I'm sure this is a rhetorical question, but I will bite.

 

I was a mortgage underwriter years ago.  These letters are documentation for the file that permit them to approve your loan when they could decline it.  You need to make their job easier and give them cover to approve your loan.

 

This is like when somebody says, "Hi, how are you?"  The approrpiate response is, "Fine, you?"

 

Don't give a flip response.  Explain what happened and more importantly why it's not going to happen again.

 

Sometimes you just have to say what is expected.

FICO 08: EX-698, EQ-732, TU-705 - [8/2/2019]
FICO 09: EX-748, EQ-775, TU-748 (8/2/2019)
Mortgage: EX-737, EQ-712, TU-748 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | Penfed Promise 20.5K | BECU CLOC 10K | DCU Visa 10K | BofA AK Air Visa 5K | Apple (Goldman) MC 6.5K |
Amazon Prime 10K.
276.5K Total Revolving.
Alliant Car Loan 16K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 2 of 10
Established Contributor

Re: Underwriter Letter of Explanation?

Well my explanation is the truth. I just didnt feel like paying. Is this something that will get me denied? How do you word it so it isn't so negative


Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
Message 3 of 10
Senior Contributor

Re: Underwriter Letter of Explanation?


@CreditGuy03 wrote:

Well my explanation is the truth. I just didnt feel like paying. Is this something that will get me denied? How do you word it so it isn't so negative


If that is the explanation that you wish to submit to the underwriter, then go for it.

 

Such explanations should consist of:

 

1) What happend.

2) Why it happened.

3) What has been done to prevent it from happening again.

 

 

Message 4 of 10
Valued Contributor

Re: Underwriter Letter of Explanation?

When I was a mortgage undwriter we always referred to LOE's as "any lie in print."  

 

Brutal honesty is not always required.  If you have a spouse, you probably understand this.

 

I guarantee you, if you tell a mortgage underwriter that you just didn't feel like paying your bill, they will decline your loan.  Lates within 24 months of a mortgage loan is grounds for a denial.

 

I don't know if it's a 30 days or a charge-off because you don't say, and is it two accounts?

 

Willful failure to pay your bills on time is absolute gorunds to decline your loan.  If I were underwriting it, I would decline you.

 

That underwriter is a first-line person with the power to grant or deny your loan.  He or she has multiple levels of supervisors and then the ultimate investors, FNMA, FHA, auditors, bosses.  They are subject to losing their job.

 

This is no time to be {Mod cut. No need to say that}.  Not if you want to get a mortgage.

FICO 08: EX-698, EQ-732, TU-705 - [8/2/2019]
FICO 09: EX-748, EQ-775, TU-748 (8/2/2019)
Mortgage: EX-737, EQ-712, TU-748 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | Penfed Promise 20.5K | BECU CLOC 10K | DCU Visa 10K | BofA AK Air Visa 5K | Apple (Goldman) MC 6.5K |
Amazon Prime 10K.
276.5K Total Revolving.
Alliant Car Loan 16K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 5 of 10
Highlighted
Valued Member

Re: Underwriter Letter of Explanation?

Just go ahead and write that in the letter, tell them the truth. Let us know how it goes. Lol
Message 6 of 10
New Contributor

Re: Underwriter Letter of Explanation?

This is most likely a troll thread, but I'll bite...

 

Your attitude makes me question your responsibility, and whether you should be thinking of entering into a mortgage in the first place.  "I just didn't feel like it" isn't an appropriate response, and you know it.

Message 7 of 10
Established Contributor

Re: Underwriter Letter of Explanation?

The Creditguy just said-

 

"Well my explanation is the truth. I just didnt feel like paying."

 

That's awesome.

Message 8 of 10
Frequent Contributor

Re: Underwriter Letter of Explanation?

Maybe OP is Peter from Office Space.

Yeah, I don't like my job very much so I'm just not going to go any more. What about your bills? I never really liked paying bills so I'm just not going to do that any more.

Worked out for the guy in the movie. Good luck!
Message 9 of 10
Super Contributor

Re: Underwriter Letter of Explanation?


@CreditGuy03 wrote:

Well my explanation is the truth. I just didnt feel like paying. Is this something that will get me denied? How do you word it so it isn't so negative


If you really want the mortgage, don't be blunt with your reason as stated - I just didnt feel like paying.  Word it in a way that will be acceptable and not get you declined.

Message 10 of 10
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