One of the reasons getting a mortgage can sometimes be frustrating is because there’s a lot of work that goes on behind the scenes. Most of that work is done by an underwriter who reviews and verifies the mounds of information you have to supply your lender with in order to get a loan.
This process of underwriting is complicated because the underwriter has to follow the guidelines of the specific mortgage company, the state, the federal government and the specific investor who is guaranteeing the loan (Fannie Mae, Freddie Mac, the Department of Veterans Affairs, etc.).
What Is Verification of Employment?
One step in the underwriting process is the verification of employment (VOE). The mortgage lender needs to make sure you are and have been employed to ensure they’re taking into consideration all of your income sources.
This process varies from lender to lender. Here at Quicken Loans, we usually verify your employment with your employer either over the phone or through a written request. About 10 days before your scheduled closing, it’s not uncommon to re-verify your employment. This is done to make sure nothing has changed with your employment status.
Why Do I Need a Verification of Employment?
This double verification often confuses clients because it seems like redundant work that is slowing down their loan process. But we’re checking your employment early on to make sure you qualify for a loan before you’ve invested a lot of time in the process. We then recertify your employment right before closing to make sure nothing’s changed.
We’re required to recheck your employment because a change in jobs can affect your ability to make your monthly mortgage payment. This is why we always encourage clients to avoid changing jobs or doing things like getting a new credit card or auto loan while applying for a mortgage.
How Do You Verify Employment?
Another reason we’ve found clients get frustrated with the VOE process is because it’s not always as simple as calling the employer and checking a box. To meet government and investor regulations, we have to call your employer on a phone number that is verified by a third party, such as Google.
For example, when you give us the number to your employer, we’ll Google it, and if it shows up as connected to the company, we can then call that number and talk to your employer. The reason for this is to prevent fraud – such as when someone gives us the number of a friend or relative who pretends to be an employer.
This third-party verification requirement can present difficulties when we’re working with clients employed by small companies that may not have a website or nonprofits.
Involving the client in the verification process is a conflict of interest. We always have to be able to independently verify the number and then talk to an employer. We also have to verify the employment without any involvement from the client. We can’t call your work number, for example, and have you hand the phone to your boss.
The complexities of verifying employment are why a client will sometimes be told, “We’re working on your verification of employment.” It’s just not always as simple as calling a phone number and being done with it.
Hopefully this article has clarified the VOE process for you, and as always, let us know what questions you have in the comments below.
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