Submission Cover Letters for Underwriting

Written By: Stacey Sprain

Someone asked me this week for my opinion on underwriting cover letters- Should they be prepared and submitted with every loan? What should the content of the cover letter consist of? How should a cover letter be formatted?

In my opinion, using a cover letter on every loan certainly can’t be a bad thing. Underwriters will appreciate and respect you for taking the time to prepare a short summary of your loan file for them and even more importantly, I’ve always found that it’s helpful to use a cover letter when preparing your file as a last step because it also can help you catch things you’ve missed or forgotten to do.

I strongly suggest creating a standard cover letter you can use for all of your loan submissions. It doesn’t need to be anything fancy, just simple in format. Here is an example of the data I include on my own personal standard underwriting cover letter:

Company Logo

Underwriting Submission Cover Sheet

To: (insert name of underwriter or underwriting department with a specific lender)
From: (insert your name) at (insert the name of your employer)
Email: (add your email contact address)
Phone: (add your contact phone number) Fax: (insert your contact fax number)

Next, insert some sort of standard verbiage such as the following:

Below please find an outline of the attached loan submission details. Please contact me using the above contact information if I can provide further information or when you reach a loan decision. Thank you!

Next, include standard loan details that would be relevant as overview for any loan type:

File Name: Loan Number:
Loan purpose: (indicate whether purchase, cash out refinance, rate/term refinance, streamline refinance, IRRRL etc).
Proposed LTV/CLTV:
Proposed Qualifying Ratios:
Current housing expense: Proposed Housing Expense:
Borrower Fico Score: Co Borrower Fico Score:
AUS Status: (indicate whether AUS findings are included for DO/DU or LP and what the actual findings status result is- Approve/eligible, Approve/ineligible, Refer/Eligible, etc.)
Relevant Loan Characteristics: (here you would want to indicate whether the loan includes certain loan traits such as an REO property, Non-occupant co borrower, HUD-approved condominium or spot loan condominium, manufactured property, 2-4 unit property, rural property, non-traditional credit or loan amount exceeding $417000 etc).


I use the categories in this section to specifically list and explain the most crucial summary detail by topic.

Subject Property/Collateral: Indicate important details regarding the subject property to give an overview to the underwriter.

Employment/Income: Indicate noteworthy explanations on how you derived income calculations, background and history of a borrower’s employment history if needed, point out job gaps and brief explanations if necessary, or simply state that borrower is stable employed, how he/she is paid (hourly, weekly, monthly) and if additional sources like overtime, bonus were used in qualifying.

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Assets/Funds to Close/Reserves: Point out the source of required downpayment, explain odd deposits appearing on statements, explain if borrower is saving to close, if receiving gift funds, if using proceeds from sale of personal property, …

Credit/Liabilities: Indicate fico scores, note non-traditional credit sources, explain outdated derogatory ratings, if accounts listed do not belong to borrower, if debt has been paid down, if debt has been omitted and why, include any comments relative to giving a brief overview of the credit for each borrower.

Comments/Compensating Factors: I like to use the last part of the cover sheet to identify potential negative loan factors I recognized in processing and point out the compensating factors I feel offset the concerns. This is where you can clearly communicate to underwriting that you are aware of certain issues yet still believe the loan should be approved and most importantly WHY you feel the loan should be approved. This is also where you would want to list any items you have not included yet have requested and are expecting, etc.

I’ve found that using cover letters consistently actually reinforces the loan submission and helps to teach you how to thoroughly review each loan file just as an underwriter would. Any source of communication you can create between yourself and the underwriter is a positive thing so taking a few minutes on each file to prepare a short cover letter will certainly pay off to your advantage!

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About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at:

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.