Have you been asked by your mortgage lender during the underwriting process to write a letter of explanation (LOX) and don’t know where to begin? You might have an overdraft fee on your bank account ( or NSF // non-sufficient funds), a late payment or two on your credit report, a different address on your bank statements than your current mailing address, or a deposit to your bank account that needs to be sourced.
Here’s the basic structure you can follow when crafting your LOX:
- Greeting and date
- Cite the incident with all applicable identifying information (date, last four numbers of the account number, institution/creditor)
- Explanation/solution/what has been done to improve the situation and prevent future occurrences
- If requested, supply appropriate documentation (cancelled checks, proof of payment, etc.)
- Closing
SAMPLE LETTER OF EXPLANATION:
4/29/2013
Re: Mortgage Application
Dear Sir or Madam:
Below are the explanations you have requested in…
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