NACA Letters of explanation are simply that.
Short paragraph or less explanations for certain things that come up that underwriters(both NACA and the lender) require. Often times they are extremely simple and take less than a minute or two to write.
TIP: save your template for your letters of explanations, as you will likely have to write several throughout the process. This way you can just type into the letter without having to write all of the other text such as “To whom it may concern”, Your name, naca ID number, etc.
They could be in regard to: Name variances, address variances, bank cash withdrawals, large non payroll deposits, cash deposits, charge offs, tax liens, so much more.
Bottom line, keep it simple and to the point. They don’t need a ton of details.
Keep it simple. Say on each:
To Whom It May Concern:
The following is an explanation of…..
Then list the issue(s) I’m addressing & the explanation, sign & date and that’s it!
If you have any questions you can always contact us.