Verbal verification of employment: timing, script and call record

A verbal verification of employment is a short confirmation that a borrower is still employed, obtained by the lender just before or just after closing; lenders shorten it to VVOE. Despite the name, Fannie Mae lets the lender get it verbally, in writing, through an employment verification vendor, or by another reasonable and verifiable method (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment).

The call is narrow. The processor asks whether the borrower works there, in what position, since when and whether full or part time. Income was already documented earlier, with papers such as pay stubs, W-2 forms or a written VOE, so the call only checks that nothing changed.

Fannie Mae does not set a format for the record. Lenders still keep one in the loan file, and an FHA lender that documents the job by phone must note the name, title and phone number of the person who confirmed it (HUD Handbook 4000.1, Employment Related Income).

The lender does it, usually a loan processor, an underwriter or a verification vendor working for the lender. The employer only answers: HR, payroll or a manager confirms the facts. The borrower issues nothing, but can speed things up by telling HR the call is coming and by giving the lender HR’s main line.

1. Find the employer’s phone number from a source independent of the borrower, such as a directory listing or the company website.
2. Call within the window that applies to the borrower and the loan program.
3. Ask the four standard questions and write down each answer as given.
4. Record the name and title of the person who confirmed, and the date and time.
5. Sign and date the record, and flag any difference from the loan application to the underwriter.

• Calling a number printed on a letter the borrower supplied, then treating that as independent contact.
• A call made too early, so the record falls outside the window before the note date.
• A record with no name or title for the person who answered.
• Reading a borrower on leave as unemployed instead of applying the leave rules.
• Asking the employer to send pay records on the call, which belongs in the written VOE.

The window depends on how the borrower earns money and which rule book the loan follows. The note date is the date the borrower signs the promissory note at closing, and every window counts back from it.

• Fannie Mae lets the lender get the VVOE after closing, up to loan delivery; without it before delivery, the loan cannot be sold to Fannie Mae (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment).
• For FHA, electronic reverification data must be current within 30 days of the verification date (HUD Handbook 4000.1, Employment Related Income).

Keep the call to confirmation. HUD describes reverification as direct contact with the employer that the lender verifies independently, so the number should never come only from the borrower (HUD Handbook 4000.1, Employment Related Income).

Under FHA’s alternative documentation route, the lender confirms the job by phone, signs and dates the record, and notes the name, title and phone number of the person who confirmed it (HUD Handbook 4000.1, Employment Related Income). The call record below has a line for each, so one record works for both rule books.

1. Opening: “I am calling from [Lender] to confirm employment for a mortgage application. Our applicant has authorized this check.”
2. Ask: “Is [Borrower name] currently employed by you?” Note yes, no, or on leave.
3. Ask for the current job title, then the start date, or the end date if the person has left.
4. Ask whether the job is full time, part time, seasonal or temporary.
5. Ask for base pay only if the employer’s policy allows it, and note “declined” if not.
6. Closing: thank them and ask for their name, title and direct number.

If the employer says the borrower is on temporary leave, Fannie Mae tells the lender to consider the borrower employed and to follow its temporary leave income rules (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment). Record the expected return date on the call record.

For a self-employed borrower, there is often no HR desk to call. Fannie Mae lets the lender use the method that best fits the business, and the record must confirm the business exists and that the borrower still runs the same activity (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment). Lenders often use evidence such as a state business registry listing, a phone directory listing or a letter from the borrower’s CPA.

Schedule K-1 income is income passed through to an owner of a partnership or S corporation. When you qualify with both wages and K-1 or self-employment income from the same business, Fannie Mae applies the employee timing below 25% ownership and the self-employed timing at 25% or more (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment). When rental income is the only income on the K-1, no verbal VOE is required (Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment).

The written VOE comes early. The lender sends Form 1005 to the employer, which returns it with earnings for the current year and the past two years (Fannie Mae Form 1005, Request for Verification of Employment). It documents income for underwriting.

The verbal VOE comes last. It does not measure income; it checks that the job documented earlier still exists. A file usually needs both, or the borrower’s pay stub and W-2 forms in place of the written form. The verification of employment form guide covers the written step field by field.

Most delays come from a call nobody answers or a change nobody mentioned. A few habits keep the last week before closing quiet.

• Tell your loan officer at once about a new job, a new title, reduced hours or a planned leave.
• Give the lender HR’s main line and the name of someone who can confirm employment.
• Warn HR that a lender will call, especially at a small company where the owner answers.
• Keep your latest pay stub at hand in case the lender wants a fresh one.

• Fannie Mae Selling Guide B3-3.1-04, Verbal Verification of Employment: Sets the 10-business-day, 15-business-day, 120-day and post-closing windows, the accepted methods, the temporary leave rule and the self-employed rules for the verbal VOE.
• HUD Handbook 4000.1, Employment Related Income: FHA reverification of employment is independently verified direct contact with the employer within 10 days before the note; phone verification records the name, title and phone of the person reached.
• Fannie Mae Form 1005, Request for Verification of Employment: The written VOE form asks the employer for year-to-date and past two years of gross earnings and is returned directly to the lender.