The purpose of a letter of explanation of a bankruptcy is to explain to a potential lender the extenuating circumstances for an unfavorable credit history. These can include loss of a job, medical problems, family member deaths and other circumstances that are unlikely to reoccur. A combination of these credible excuses sometimes help reduce the waiting period for obtaining a new mortgage after bankruptcy or foreclosure, according to Innman News.Continue Reading
With the Federal Housing Administration, the normal waiting period for obtaining a mortgage after a Chapter 7 bankruptcy is five years. According to Innman News, a well-written letter of explanation detailing the extenuating circumstances and the individual's efforts to fix the problem that lead to the bankruptcy filing has the potential to reduce the waiting period to two years. Because lenders sometimes impose stricter limits than the federal agencies, borrowers have the burden of proof that they are worth the financial institution risking losing FHA funding due to too many foreclosures.
In the period between filing for bankruptcy and qualifying for a new mortgage, families often find themselves looking at rental properties for a place to live. The bankruptcy makes finding rentals difficult too. However, a similar letter addressed to property management companies increases the chances to get a rental property, according to Myvesta Foundation.Learn more about Credit & Lending
A mortgage letter of explanation is written by someone attempting to borrow money and explains a situation that could present lender risk. When risk is evident, mortgage underwriters often require a letter of explanation before they approve a loan.Full Answer >
A letter disputing a credit report should include the person's full name and address, a list of all disputed items and a detailed explanation of why each item is incomplete or incorrect, advises the Federal Trade Commission. The correspondence should include a copy of the credit report with the disputed items circled and copies of any related documentation as well. A sample dispute letter is available on the Consumer Information website of the FTC.Full Answer >
When writing a letter disputing credit, include the name on the account you're disputing, the account number and a detailed explanation of what is in dispute, as MyFICO explains. Send the letter as certified mail with a return receipt requested in order to have proof that the company or individual with whom you are lodging the dispute receives it.Full Answer >
You write an appeal for reinstatement of financial aid letter by documenting the extenuating circumstances that somehow had an impact on your academic performance, the University of Alabama says. Some circumstances considered for appeal include a death of a family member, trauma in the student's life that impacted his mental or physical health, and withdrawal from college due to military service.Full Answer >