Verification of Employment (VOE) is a process used by

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

s and

mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pu ...

lenders in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

to review the

employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...

history of a

borrower A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this ...

, to determine the borrower's job stability and cross-reference

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. For ...

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 to ensure the information is correct. Employers are not required by law to complete the VOE forms. Once a mortgage has been approved and the borrowers have signed their mortgage documents, a Verbal Verification of Employment (Form 90) 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 is the state of working for oneself rather than an employer. Tax authorities will generally view a person as self-employed if the person chooses to be recognised as such or if the person is generating income for which a tax return n ...

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 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. A ...

or, for borrowers who do not have a traditional business model, a letter from their

Certified Public Accountant Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. It is generally equivalent to the title of chartered accountant in other English-speaking countries. In the United Sta ...

indicating that they have firsthand knowledge of their previous and continued employment as their tax preparer.

See also