Write a Late Payment Explanation Letter This letter should include a thorough explanation of why you missed a payment, what you've done to remedy the situation, and how you've managed your finances since the late payment occurred.

A letter of explanation (sometimes called an LOE or LOW) is a document requested by mortgage lenders when they want more details about your financial situation. An underwriter may request a letter of explanation if they run into questions about your finances during the mortgage approval process.

The lender is required to provide the borrower with a GFE within 3 business days after the mortgage loan application is received. Borrowers will receive two Truth In Lending Disclosure Statements, or TILs, in the 3. mortgage loan process.

For example, before providing the LE, you may ask for the names, account numbers and balances of a borrower's checking/savings account; however you may not require a copy of the bank statement or similar document for verifying the information.

Letters of Explanation (LOX) For instance, if you have a recent gap in your employment, the underwriter might request an LOX to clarify the gap and why it occurred. Other scenarios that might warrant an LOX include recent deposits into your bank account, recent credit inquiries, money transfers, etc.

Letter of Explanations To Mortgage Underwriters on Recent Late Payments. When a mortgage underwriter requests a letter of explanation on recent late payments, again, all borrower needs to do is write a brief one or two-sentence lox, sign, and date. There is no right or wrong answer in writing a letter of explanation.