VOE - Verification of Employment

Sagar,

The lender wants to verify the documents provided by the borrower regarding his income details. This is why he sends a request form to the borrower's employer and this form is the Verification of Employment.

The lender's primary intention is to check the financial status of the borrower prior to approving the loan.

Hi Adonis,

I know that VOE is for verification for Income, but then how can a Lender take a risk by Verbal VOE what motive is behind this, any Lender will prefer written VOE but in some cases Verbal VOE is preferred why is tat so or rather how does it helps the Lender ?

In VVOE, lender gets verbal verification from the employer or CPA of a self employed person. Such verification is done for borrowers with good credit to save on time.

Hi Sagar,

When a lender receives a loan application, he sends a written Verification of Employment (form 1005) to those who have been the borrower's employers for the past 2 years. The form is usually filled up by an authorized representative of the employer.

Now, after the lender approves the loan, and the borrower signs on the loan documents, a verbal VOE is carried out with the current employer. Only after the verbal verification is over, the borrower receives the funds from the lender. The verbal verification ensures that the borrower has not stopped working since he has submitted the application.

Take Care

Hi Sara,

Thanks for the reply, I have one more question , so Verbal VOE is carried only when the lender receives a written VOE from the borrower i.e. 1005, so on that basis to verify the details provided in the 1005 the Lender re-verifies it with the borrower.

Am I right !!! or rather am I on the right track ??

Regards

Sagar

Sagar,

It depends on the loan program, but yes, you are getting close.

A written VOE, if required, spells out information about employment, compensation - specifically for overtime, bonus, etc. This is not required on every loan program or by every lender.

A verbal VOE is done commonly on all loans as it verifies the current employment status of the applicant. A verbal VOE is often done within 24-48 hours of loan closing to make sure the applicant hasn't changed jobs.

If there are concerns about the validity of a written VOE the lender may also utilize a verbal VOE to confirm the information.

Hope this helps.

Ken,

Thanks for the info picture is a bit clear to me now, still have some doubts will collect them and will post it here, I hope you will give ur valueable feedback.

Thanks

Sagar

looks like there's a little misinformation here. although the definition of vvoe is correct (they call your employer and ask your start date and if you're still employed -- they do NOT ask what your income is though) -- the vvoe is a documentation "level" that exists from du. any direct lender using du will have several levels of docs -- paystub, paystub and w2, etc. if the profile at inital application is so "good", du may only ask for a verbal verification to be performed. this means NO PAY STUB is needed. so, if you have a self employed client who may be a little too agressive with deductions, DU may give you a VVOE which means you will not need tax returns and you will still be able to write a conforming loan. fannie has tweeked du a bit and it is more rare by the week that goes by.. but it still exists.

well, i have to disagree with the final commentary concerning self employed borrowers. DU (Desktop Underwriter for the unitiated) will never give a verbal voe for self employed. a verbal voe is to be completed by an employer - since the employer of record for a self employed individual would be the individual himself, this obviates the possibility of independent verification.

furthermore, more and more lenders are taking a conservative view of verifications and are less likely these days to accept du findings requesting only a verbal voe.

2008 has been a trip, hasn't it?

A verbal VOE is done on all loans and is usually done right before closing to make sure you are still employed and that nothing has changed.

The mortgage lender's Verification of Employment form is a document signed by the borrower's employer verifying the borrower's position and salary.

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I'm surprised this is acepted so readily. an em,ployer who wants to do you a favour can write down anything you want - what I'd really want to see is payslips for the past few months.

wretched, it's typical to get the pay stubs up front, but often the written voe is used to document other aspects of a person's employment, such as last pay raise, likelihood of continued bonus or overtime earnings, normal hours worked, etc.

and, of course, a verbal voe is done so as to verify that a borrower is still working, just before closing.

Here is a situation, hypothetical of course....

In order to take advantage of a great deal and the tax credit (before it got extended), a couple decides to go for it despite the fact that closing would be about 6 months before one of them starts their job. The currently working spouse can cover payments and by living frugally they'll probably break even as far as savings go over this time period. However, the single income wouldn't be enough to actually qualify the loan, so to make up for this, they use a relative as a cosigner. However, roughly two weeks before closing the cosigner is notified his job will be terminated in 3 months. Will this be turned up in the vvoe, and what would the consequences be?

it's not possible to say if this will turn up in a verbal voe, though my suspicion is that it would not show up. if not, then the mortgage would be granted (presumably) and these people would go on their merry way.

if a vvoe did result in this information being made public, then the borrowers would likely suffer a denial of the loan.