What Is Letter of Explanation (LOE)?
Letter of Explanation (LOE): A short signed letter answering an underwriter's question about something in your file.
Also called: LOE, LOX
A letter of explanation (LOE) is a short, signed letter that answers a specific question from the underwriter.
Common reasons
- Large or unusual deposits
- Recent credit inquiries, and whether they led to new debt
- Gaps in employment
- Late payments or collections
- Address differences on documents
- A recent name change
How to write one
- Answer only the question asked
- Be factual and brief, with dates and amounts
- Include supporting documents if you have them
- Sign and date it
Example
"The $3,200 deposit on March 4 is the sale of my 2015 Honda Civic to John Smith. A copy of the bill of sale and his check are attached."