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Originally posted by brokerjack

I'd like to add that for tough files, I've had some success with including a Homebuyers Education Class Certificate. They're free and simple and offered by most MI companies. Seems to help. Certainly won't hurt.

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Originally posted by U812

Painting the picture or putting the puzzle together for the Lenders inside Processor and more importantly the Underwriter is in my opinion one of the most overlooked aspects in the loan process. I would argue a good many Loan Officers either do not feel it’s necessary, do not know how to properly structure one, or are sadly, just to lazy to take the time to compose one. When in reality it is one of the more important documents in a well prepped loan package.

A properly laid out Loan Officer Cover / Explanation Letter is a summary of the loan in itself, the Good, the Bad, and the Ugly, with explanations, calculations, and emphasis on key issues or points. When putting together a Cover Letter it’s ALL about clarity. Some items may require an in-depth explanation while others can be covered adequately in a more general sense. I’m not saying every single aspect of the loan has or should be gone over, but any loan officer worth his / her salt should have a very good grasp on the positive and negative issues regarding a loan application and which items may need a more detailed explanation. So, be thorough without running on and for goodness sake be clear and concise.

Your objective is to explain issues, outline computations, and accentuate the positive, in a manner that ultimately helps the Underwriter do their job more efficiently, thus hopefully eliminating additional or unnecessary stips, while enabling them to understand your thought process regarding that particular loan application.

I often take out the findings and write my letter referencing the specific stips and anything else I feel needs an explanation or clarification. Whenever I have income calculations that are not the standard run of the mill calcs, I explain how I came up with the income figures I did. Explain Credit issues and Public Record issues and any of the thousands of other things that can come up with a loan application.

Lastly, make sure you reference supporting documentation and make it easily identifiable for the Lenders Processor and Underwriter to associate with the particular explanation in your Cover Letter.

Good Cover Letters are well received by Underwriters and their assistants and can be an immense help to all when processing / underwriting a file.

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