I said, "I will confess my transgressions to the LORD," and You forgave the iniquity of my sin. Therefore let everyone who is godly offer prayer to You at a time when You may be found.
Inasmuch as the saints are always aware of their sin and seek righteousness from God in accord with His mercy, for this very reason they are always also regarded as righteous by God. Thus in their own sight and in truth they are unrighteous, but before God they are righteous because He reckons them so because of their confession of sin. They are actually sinners, but they are righteous by the imputation of a merciful God. They are unknowingly righteous and knowingly unrighteous; they are sinners in fact but righteous in hope. And this is what he is saying here: "Blessed are they whose iniquities are forgiven, and whose sins are covered" (Psalm 32:1). Hence, these words follow (v. 5), "I said, I will confess my transgressions to the Lord" (that is, I am always conscious of my sin, because I confess it to Thee). Therefore, "Then Thou didst forgive the guilt of my sin," not to me only but to all. Hence these words follow (v. 6): "Therefore let everyone who is godly offer prayer to Thee."
From Lectures on Romans (Luther's Works 25:258)