Common Underwriting Conditions — A Processor's Guide
Every underwriting condition costs time. Understanding exactly what document satisfies each condition — and getting it right the first time — is the difference between a clean CTC and a second or third round of conditions.
Frequently Asked Questions
What is a Letter of Explanation (LOE) and when is it required?
An LOE is a signed borrower letter explaining a specific underwriting question — employment gap, large deposit, address discrepancy, or credit inquiry. CTC drafts LOE templates for borrowers to sign; a well-written LOE satisfies most conditions in one pass.
How do I document a large deposit?
Provide the source document — pay stub for payroll, settlement statement for property sale, gift letter + wire for gifts, brokerage statement for investment liquidation. CTC sends a specific request letter to borrowers listing exactly what's needed.
What clears a credit inquiry condition?
A signed borrower statement naming each inquiry, identifying the lender, and stating whether a new account was opened. If a new account was opened, the new payment is included in DTI. CTC provides a standard credit inquiry letter template.
Put this into practice.
CTC handles the file so you can stay in front of borrowers and Realtors.