July 3, 2013 at 2:15 pm #8391sfca24Participant
I am so happy and grateful that I found this forum.
My husband and I have our second appoitment coming up, and I am working on our Task List. The most daunting of items on this list are the Letters of Explanation for the many blemishes I have on my credit report. While my credit score has rebounded to 650ish, and the last couple years have been pretty good, I had a rough time when I first graduated from college, and there are lots of late payments and even a charged off credit account.
Can someone provide an example of a LOX that was accepted by underwriters? I am unsure of how detailed to be, and the tone that the letter should take on. Is there a resource for example letters somewhere?
Thank you in advance for any advice you can offer me!July 3, 2013 at 4:45 pm #8394
The letter should be dated and addressed To Whom it May Concern.
It should state what the issue is including account name and # if available.
You should explain why there was an issue, what you have done to correct it and why it won’t happen in the future.
I hope this help.July 3, 2013 at 5:19 pm #8395sfca24Participant
Thank you, isthisajoke.July 3, 2013 at 5:37 pm #8396July 3, 2013 at 6:04 pm #8402
Thanks Tim, I have lot’s of practice with LOX HE HE LOLJuly 3, 2013 at 6:05 pm #8403
Don’t I know it! 😉
Have a Great Fourth!July 3, 2013 at 6:51 pm #8404
Thanks you too….we are moving forward AGAIN was hoping to hear something today but haven’t heard back from the MC so hopefuly Friday FINGERS CROSSED!July 25, 2013 at 1:27 pm #8605homeowner726Participant
I have another question that I haven’t been able to find a prior discussion about this topic. I have one creditor on my Action List which requires a LOX and it must be paid in full. Unfortunately, I do not have details on contacting this creditor or recognizing who it is as it does not on my credit report. Since NACA requires action and appears to have an account number, would they have contact information for this creditor that they will provide me?July 25, 2013 at 4:07 pm #8615
Hard to say, actually. It would depend on how much information was included in the credit report we pulled. There should be at least enough information to give you a good lead on tracking them down though.
Please reach out to your MC to see what information may be available. If you can’t get through to your MC, email me the request with your name, NACA ID number and Forum screen name and I’ll see what I can find out for you.
August 23, 2013 at 3:54 am #8798NoNACAIDParticipant
- This reply was modified 4 years, 11 months ago by TTrumble.
- This reply was modified 4 years, 8 months ago by TTrumble.
I have questions about credit reports. My credit was ruined when I became disabled. I am now extremely low income (but live in an area of the country were that is ‘doable’) and from the one credit report I actually could obtain online, a long list of charged off accounts, either 4 or 5 of them for substantial amounts in total. About $30,000 in total, counting the 2008 Escape Hybrid which I managed to pay down to less than $15,000 when my disability caused me to loose employment but the bank managed to resell the Escape for more than I owned although they still trying to bill me for over $4000 handling fees.
And then there are still active attempts on my credit report to collect on these debts although charged off by the original debt issuers for one of them in particular at debt of 300% more than what I owed when I became disabled!
A counselor at AppalRed advised me not to respond to the debt collectors which I have. He also said I don’t need to file for bankruptcy because they can’t touch me where I’m going. True. I’m flat broke but the debts don’t charge off til March 2017. Seems an awefully long time to be harassed for a situation caused by the acquisition of a disability.
It’s irrelevant now what me CR was before but I’ve paid rent and utilities on time since October 2011 but occasionally have an NSF that I have to cough up funds for. Even when my disability was causing huge problems and I was stuck unemployed with a lease I managed to pay the rent as I had money and salable valuables socked away to handle that but what I had socked away quickly dried up.
Finally though, as I’ve finished buying resources I have been accumulating since 2011 when I realized I really won’t be able to work 9 – 5 again, in an attempt to ‘home school’ myself into a new home job to earn a living once again I imagine the occasional instances of NSF will dry up. I just don’t have the expenses I did when required to live in expensive urban areas with expensive and dependable transportation.
So after a lot of rambling, with a credit score such as mine (likely les than 600) and my disability and extremely low income is their any point in trying to get a cheap mortgage via NACA or any other means? I was thinking even a land contract might work.August 23, 2013 at 3:57 am #8799NoNACAIDParticipant
The ruining of my credit all handled in 2010. The car was repossessed in May 2010. I was classified permanently disabled in November 2010. The bad reports are due to ‘fall off’ in the 1st 3 months of 2017. Just to give a time frame here for planning purposes.August 23, 2013 at 11:30 am #8800
Without actually seeing the credit file it’s impossible to give you a definitive answer. However, based strictly on what you state here, you are likely going to have problems qualifying anytime soon.
Your credit score is not considered in the NACA process at all and the repo in 2010 is not going to be a factor since it was over two years ago. However, as long as those other collections are active, whether they are from the original creditor or not, they will have to be settled by either a payoff or a faithfully maintained payment arrangement.
Your payment history over the past 24 months (and especially the past 12 months) is the key factor in becoming qualified. Unless the debts are in dispute, not legitimate or an unavoidable debt such as medical bills, an active past-due debt must be dealt with. Becoming disabled is unfortunately only going to go so far when it comes to explaining the past due amounts. Additionally, every NSF will require explanation, and the number of NSF’s within the past 24 months may hinder qualification as well.
While I am by no means qualified to give legal advice, you may want to talk with an attorney again about a possible bankruptcy since it may actually allow you to become a homeowner sooner. The NACA program requires that you wait only 24 months from the discharge of the bankruptcy before becoming qualified. Also, the collection agencies only have to report the debt once to reset the seven year “clock” on the credit bureau reports. In other words, they won’t actually fall of your report until seven years after the last report to the credit bureaus.
Again, I can’t provide a specific, authoritative answer without knowing all the details, which would require you to go through the NACA counseling process. However, the ongoing collections and NSF’s can potentially set you back in your efforts to become a homeowner. I suggest you go through NACA counseling to find out specifically what roadblocks do exist and how to deal with them.September 2, 2015 at 4:40 pm #29066Sismai12Member
Help!!! I have my appoiment on friday and im still working on my explanation letter for the bank statements for all the withdrawals but i cant seem to understand how is the letter suppost to be … 1st i did it like a list explaning all of the withdrawals on the personal account by date and then the business account one but i dont know if i should do it like that or in form of a letter but the explanations are so small i dont think is worth it doing one explanation per pageSeptember 2, 2015 at 6:40 pm #29067zbootParticipant
What you did is good. Pretty much, my letters have been almost exactly like this:
- Item in question. Explanation.
- Item in question. Explanation.
- Item in question. Explanation.
Where explanations were typically no more than one or two sentences. There’s no point wasting paper.
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