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Post Posted: Sat Feb 23, 2008 8:35 pm    Post subject: FHA LOANS - LOE

I have never done an FHA letter of explanation for certain credits. does anyone have a sample so that i can go by? i just need to have an idea.
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Icon Mini Profile banker0679

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Post Posted: Sat Feb 23, 2008 9:34 pm    Post subject:

basically, you're writing a letter to a person.

To Whom It May Concern,

This letter of explanation will help understand my past credit history with these credit accounts (list them here) or credit inquiries (list company name and dates).
I was unable to make payment due to medical reasons/death/other reason. (Write specific reasons and/or dates that may apply)

Please contact me at xxx-xxx-xxxx for any questions regarding this letter.

Make sure to have the proof ready.....or send it in to validate your statement. Make everything simple. Do not divulge information that is NOT needed. Also, your loan officer should be helping you with this.

there's always hope!

"My credit score shot up 68 points!"
Icon Mini Profile ezmortgageloanz


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Post Posted: Sun Feb 24, 2008 9:57 pm    Post subject:

The LOE is a letter of explanation that you are writing to the underwriting department to compel them to overlook some credit blemishes in your past.

Here is one that I wrote the other day:

General Description of Situation:

The XXXX's have longed to purchase their first home ever since relocating from Texas to Virginia in May of 2000. The XXXX's decided to relocate to Virginia in pursuit of higher pay and employment stabilization---gaps in employment due to contributing factors outside the XXXX's control (downsizing, employer bankruptcy, etc.) were the driving forces behind the XXXX's late payment history. Another factor contributing to the XXXX's past was an attempt to sustain their family’s overhead on one income while Mrs. XXXX attended school (in order to improve her job/income prospects). This letter of explanation hopes to highlight and stress that the problems of the past are just that---in the past and that the XXXX's both deserve and are qualified to purchase their first home.

Positive Aspects of File:

The XXXX's are both gainfully employed in fields in high demand (healthcare/nursing and law enforcement), with employment stability and future income growth potential. In addition, the XXXX's have demonstrated an earnest desire to get “caught up” with their past obligations and have taken upon themselves to arrange payment schedules with two of the creditors with outstanding accounts in collections (payment commitments/schedules are included with this summary).

Description of Issues:
1. Husband has been employed in the same field for four years, but only with his current employer for 4 months.
2. Past collection accounts.

Compensating Factors:
1. Length of time in present profession.
2. Co-borrower is in a profession that allows for future income expansion.
3. Never late on prior rent payments.
4. Good pay history established since 2006.
5. All ratios are within qualifying guidelines.

Thank you for your time in considering our application for the XXXX's.

I personally believe that this is one of those “case-by-case” situations that FHA is so great for! Please help me assist this family of three in obtaining the dream of homeownership.

Hope this helps.


Scott Miller

National FHA Mortgage Broker
jackie lett


Post Posted: Fri Mar 07, 2008 12:38 pm    Post subject: home to buy

I ahev divorced for two years and my husband left me with two kids, since then im attending college full time, working full time and i have three foster children . My ex left me with his debts adn im making my way building my credit up Chase bank finced me a car and i kept up with the payments for 11month never late, I pay my bills on time but his medical bills is huting my score , please help
Icon Mini Profile larry

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Post Posted: Fri Mar 07, 2008 2:49 pm    Post subject:

Hi jackie,

Welcome to the forum.

I cannot understand why are you paying your ex husband's medical bill and other debts? What you says it you are doing a great job to improve your credit.

Is it written in your divorce decree that you would have to pay his debts?

Best of luck,
Icon Mini Profile Caron

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Post Posted: Mon Mar 10, 2008 12:50 am    Post subject: RE: medical bills hurting score

Hi Jackie,

How come your spouse's medical bills are hurting your score? It's good that you have never been late on your car payments but I don't understand why your spouse isn't paying for his bills. You aren't responsible in any way. By the way, didn't your spouse apply for any health insurance policy with which he could have paid off all the bills? Perhaps your spouse has used your information for the medical bills and that's the reason it is affecting your score.

I shall suggest that you go for consolidation of the medical bills if at all your spouse isn't willing to pay them off. But first of all, have a talk with the creditors and check any available document to find out for sure why your credit is getting affected because of the spouse's bills.

I know of one such community which can help you consolidate medical bills - it is the debtconsolidationcare community at "http://www.debtconsolidationcare.com/ .

Good luck

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Icon Mini Profile lisascherzer

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Post Posted: Mon Mar 10, 2008 9:07 pm    Post subject:

Hi Jackie,

I would get a copy of all three credit reports from transunion, equifax, and experian and then dispute all of his medical bills. Just state they are not yours. There is no need to explain that you were married, etc. All of them may not come off the report but some of them should. This should help your credit score even more allowing you to purchase a home soon.

P.S. Dont pay a company to do it for you. You can do this for free yourself.

Lisa Scherzer
Allpointe Mortgage
Expert Mortgage Broker
Icon Mini Profile freds11

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Post Posted: Mon Mar 17, 2008 11:48 am    Post subject:

How do you do it on your own?
Looking at refinancing mortgage in the near future.
Icon Mini Profile sara

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Post Posted: Mon Mar 17, 2008 10:48 pm    Post subject: RE:

Hi Freds,

Welcome to the forums.

Do you want to now how Lisa alone could dispute all medical bills?

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Icon Mini Profile John1

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Post Posted: Tue Mar 18, 2008 2:19 pm    Post subject: regarding the LOE

Your loan officer should assit you with the letter. If I have a borrower write the letter themselves, it turns into a boring life long story...and possibly a country song. I have found what works best for me is to interview the client, write the LOE and have the borrower review for accuracy before signing. This way it's clean and to the point. Underwriters don't have time nor will they take the time to read a novel.
John R. Dunn/Owner
Texas Heritage Mortgage
125 Moore St. Suite 105
San Marcos, TX 78666
Icon Mini Profile helping_user

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Post Posted: Wed Mar 19, 2008 4:08 am    Post subject:

So John, you mean lenders write the letter of explanation for poor credit and then get it rechecked by the would-be borrower?

Post Posted: Wed Mar 19, 2008 7:40 am    Post subject:

They can write it based on what the borower tells them and nothing else. I am not implying that they make up a story or enter anything fradulant. The letter needs to be clear and to the point and I have found borrowers try to explain way too much and turn an LOE into a novel.


Post Posted: Wed Nov 17, 2010 10:13 am    Post subject: LOE Explanation Letter

I want to knows if someone has an explanation letter to submitte the U/W why the reazon to invest for a secon property
Icon Mini Profile adonis

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Post Posted: Thu Nov 18, 2010 7:20 pm    Post subject:

Hi Jorge

You can check out the given page in order to find out how you can write an explanation letter for the underwriter:
"http://www.ehow.com/how_5854779_write-letters-explanation-mortgage-un derwriter.html"
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