Three Steps to Writing a Letter of Explanation to a Mortgage Underwriter

Ray Cole reports:

"Mortgage underwriters occasionally request explanations for various situations. If a borrower has experiences that fall outside of a lender's general guidelines, an underwriter might request a written explanation for certain occurrences. If extenuating circumstances prevented a borrower from taking certain actions, written letters can provide details about the experiences. Generally, an underwriter wants documented evidence of a problem that's resolved and that possesses little impact toward future lending risks. If a borrower's wages were 10 percent less than previous years due to an injury, a letter that reflects time missed from work for about one month would appear logical to an underwriter...Review the underwriter's request. Determine the information that's needed for a clear explanation...Write a letter that reflects the exact date range that you were absent from work. Provide specific details for your letter of explanation. Attach a note from your doctor or from your employer to strengthen your documentation...Present your letter of explanation to your loan officer. Ask your loan officer whether your explanation is sufficient. Submit information as requested to satisfy the underwriting conditions...Well-documented letters of explanation could satisfy an underwriter's concerns. Maintaining organized financial records might enable you to access your information promptly...Insufficient explanations could result in an underwriting denial. If your car payment was late while you were in the hospital or if your appraisal reflects items that have been corrected, a thorough explanation might clear the underwriter's concern. Proof of your stay in the hospital or a photo that reflects property repairs could accompany your letter of explanation for a mortgage underwriter."