It's difficult to sound sincere in a form letter. Mortgage lenders might request a letter of explanation for various red flags that come up in underwriting.Learn how to write one, and download a template. A letter of explanation consists of short descriptions you can use to fill in the gaps in your paperwork for your underwriter. It's best to keep your letter of explanation short and sweet. Include as much detail as needed, but address only the specific information the lender requested.