Verification of employment
Encyclopedia
Verification of Employment (VOE) is a process used by bank
s and mortgage
lenders in the United States
to review the employment
history of a borrower, to determine the borrower's job stability and cross-reference income
history with that stated on the Uniform Residential Loan Application (Form 1003). Lenders require complete VOE declaring all positions held for the last two years of employment history.
Most mortgages are preceded by both written and verbal VOEs. Once a lender receives the initial loan application, a Written Verification of Employment (Form 1005) is sent to all current and previous employers within the last two years listed on the application. This form is filled out by an authorized representative of the employer and includes dates of employment, positions held and a breakdown of compensation
received. This information is compared to both the loan application and the income documentation, such as W2's and paycheck stubs, to ensure the information is correct.
Once a mortgage has been approved and the borrowers have signed their mortgage documents, a Verbal Verification of Employment is conducted with all current employers prior to funding the loan. This is done to ensure that the borrower has not stopped working since the application was submitted, which would influence the terms on which the loan was approved.
VOE guidelines are different for self-employed
borrowers, as a VOE should not be completed by the loan applicant. Self-employed borrowers are typically asked to provide either a current business license
or, for borrowers who do not have a traditional business model, a letter from their Certified Public Accountant
indicating that they have firsthand knowledge of their previous and continued employment as their tax preparer.
VOE guidelines are also different for Stated Income, No Income No Asset
and No Doc loans.
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s and mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
lenders in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
to review the employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
history of a borrower, to determine the borrower's job stability and cross-reference income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
history with that stated on the Uniform Residential Loan Application (Form 1003). Lenders require complete VOE declaring all positions held for the last two years of employment history.
Most mortgages are preceded by both written and verbal VOEs. Once a lender receives the initial loan application, a Written Verification of Employment (Form 1005) is sent to all current and previous employers within the last two years listed on the application. This form is filled out by an authorized representative of the employer and includes dates of employment, positions held and a breakdown of compensation
Remuneration
Remuneration is the total compensation that an employee receives in exchange for the service they perform for their employer. Typically, this consists of monetary rewards, also referred to as wage or salary...
received. This information is compared to both the loan application and the income documentation, such as W2's and paycheck stubs, to ensure the information is correct.
Once a mortgage has been approved and the borrowers have signed their mortgage documents, a Verbal Verification of Employment is conducted with all current employers prior to funding the loan. This is done to ensure that the borrower has not stopped working since the application was submitted, which would influence the terms on which the loan was approved.
VOE guidelines are different for self-employed
Self-employment
Self-employment is working for one's self.Self-employed people can also be referred to as a person who works for himself/herself instead of an employer, but drawing income from a trade or business that they operate personally....
borrowers, as a VOE should not be completed by the loan applicant. Self-employed borrowers are typically asked to provide either a current business license
Business license
Business licenses are permits issued by government agencies that allow individuals or companies to conduct business within the government's geographical jurisdiction. It is the authorization to start a business issued by the local government....
or, for borrowers who do not have a traditional business model, a letter from their Certified Public Accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
indicating that they have firsthand knowledge of their previous and continued employment as their tax preparer.
VOE guidelines are also different for Stated Income, No Income No Asset
No Income No Asset
No Income No Asset , No Income No Job or Asset or simply Nina Loan is a term used in the United States mortgage industry to describe one of many documentation types which lenders may allow when underwriting a mortgage....
and No Doc loans.