WMC Operations Update December 12, 2014 VERIFICATION OF EMPLOYMENT As part of Waterstone Mortgage s due diligence and to comply with various guidelines and overlays, we are required to verify that each borrower is still currently working at their place of employment. There are two types of verifications, verbal and written. Employment should be verified twice throughout the loan process prior to sending the file to Underwriting and again within 10 calendar days of closing. Analyzing a File Prior to Ordering Prior to requesting a (VOE), there are several items that should be analyzed on a loan file to determine the correct course of action. 1. Determine the loan product. If the file is Conventional, FHA or VA then a Verbal VOE may be sufficient. If the file is USDA then a Written VOE is required. 2. Review the W2s and paystubs. Has the borrower worked at the same employer for the last 2 years? o If the answer is yes, only one VOE is needed. o If the answer is no, a VOE will be required for each employer the borrower worked for in the last two years. Verbal VOEs are sufficient for all loan types except USDA. Is the monthly income easy to determine by analyzing the paystub? o If the answer is yes, a Verbal VOE is sufficient (except for USDA loans). o If the answer is no, a Written VOE is required. Does the borrower receive commission, overtime or bonus income that is needed for qualifying? o If the answer is no, a Verbal VOE is sufficient (except for USDA loans). o If the answer is yes, a Written VOE is required. 3. Are there multiple borrowers? A VOE should be obtained for each borrower s current and prior employment according to the guidelines listed above. 4. Is employment section of my 1003 accurate? If there is prior employment not listed on the 1003, be sure to enter the employer information so that the VOEs will print correctly in Encompass. **If the loan product is USDA, refer to USDA guidelines for specific overlays relating to employment and income. Additional verifications may be required for other household members earning income.** Requesting a Prior to Underwriting Once you have determined the type of VOE needed, you will need to print the appropriate form. Verbal VOE: From the print menu in Encompass, select the Custom Forms tab. Click on the drop down menu Look In and selection WMC Custom. Page 1 of 11
Next, scroll down to Verbal VOE- Borrower and Verbal VOE- Co-Borrower. Select the VVOE you need and click Add. The forms will move over to the right hand side under Selected Forms. From here you have two options, you can print the forms and hand-write the verification information or you can preview the form to type the information on the form in Microsoft Word. Once you have the verification ready to be filled out, you will need to find a contact phone number for the employer. Processors and/or Loan Partners are responsible for finding contact information for the employer via a third party source (ie: phone book, directory assistance, Google.com, 411.com, etc). The information provided by the borrower should not be Page 2 of 11
used unless it is first verified by a third party source. Indicate on the VVOE form how the phone number was obtained. When selecting Other, be sure to indicate the source. Upon obtaining the phone number, call the employer and ask to speak to Human Resources, Payroll or a manager that is able to provide the information you will be requesting. Once you are connected to the applicable party, verify the information located on the form. Fill out the form as you request the information. Complete the form in its entirety and sign/date the form. Some employers may not be able to provide the borrower s probability of continued employment. If this is the case, write Unable to comment in that section. You may also find that the employer is not able to provide any information over the phone. If this is the case, you will need to request the fax number to where a Written VOE can be sent for completion. Once the VVOE is completed, signed and dated upload the form to the VVOE Borrower or VVOE Co-Borrower placeholder in the efolder. PLEASE NOTE: If there are multiple VVOEs that need to be obtained, you will need to change the employer name on the form for each one completed. Encompass does not print VVOEs for each listed employer. Written VOE: From the print menu in Encompass, select the Standard Forms tab. Click on the drop down menu Look In and select Verifications. Page 3 of 11
Next, select the VOEs you wish to print and click Add. The forms will then move over to the right hand side labeled Selected Forms. Once they have moved over, click on the Print button to send the forms to your printer. Once you have the verification ready to be filled out, you will need to find a contact phone number for the employer. Processors and/or Loan Partners are responsible for finding contact information for the employer via a third party source (ie: phone book, directory assistance, Google.com, 411.com, etc). The information provided by the borrower should not be used unless it is first verified by a third party source. Upon obtaining the phone number, call the employer and ask to speak to Human Resources, Payroll or a manager that is able to provide the information you will be requesting. Request for them to provide you the fax number of where the form Page 4 of 11
should be sent and if there is a specific attention the form to be addressed to. Once the fax number is received, add the phone number to the WVOE. Next, sign the form in section 3 and date in section 5. Indicate the areas that should be filled out on the form to make it clear to the employer what is being requested. Circle or star the sections that need to be filled out. Be sure to indicate the years in section 12B. Once the form is ready, prepare a fax coversheet and indicate where the form should be returned to. Fax the form to the fax number provided by the employer with a copy of the signed Borrower s Authorization. Once the form is received by, upload the completed VOE to the VOE placeholder in the efolder. Ordering a VOE Using The Work Number Some employers use a third party service to provide their VOE information. The Work Number is one of many third party sources used by employers. Processors and/or Loan Partners are able to order VVOEs and WVOEs through this service by utilizing the Services tab in Encompass. This service should only be used if the employer uses The Work Number to provide their VOEs. Note: Currently, The Work Number is the only third party employment verification service available in Encompass. Page 5 of 11
To order from The Work Number, click on the Services tab located in the lower left hand corner of the Encompass loan file. Click on Order Verifications. A new box will open. Select The Work Number and click Submit. Enter your username and password information then select the type of verification you wish to order. Employment Only will provide you a verbal verification. Employment Plus Income will provide income information as well. If you wish to request both current and prior employment, select Both Current & Previous. Once your selection is made, click Order. Page 6 of 11
Another box will open showing that your order is being processed. Once the order is completed, you will receive a message that your order was submitted successfully. Click OK. Page 7 of 11
The VOE will then open into the Services View tab. Click on the Loan tab to go back to the file. Open the efolder and locate the Verifications placeholder. Delete the placeholder by selecting it and then clicking on the delete icon in the upper right hand corner of the efolder. The VOE will then automatically move into the File Manager. Click on File Manger to view the VOE in the Unassigned area of the File Manager. Move the VOE into the VVOE or VOE placeholder (whichever is applicable). Page 8 of 11
An additional note regarding VOEs from The Work Number: When using a third party for a VVOE, such as The Work Number, we need to verify the date of the information on the system. Per FNMA guidelines, the information in the vendor s database cannot be more than 35 days old as of the Note date. That is the key and it directly correlates to Information Current As Of Date on the report. If the information is past the 35 days, call the employer for more information. Updating the 1003 Upon receipt of the Verbal or Written VOE, the information obtained should be entered into the Employment Information section located on page 1 of the 1003. Update the dates, title, etc and add the income information if obtained. Click on Show All (VOE) to see all of the employers if there are more than one. Page 9 of 11
Calculate the income with the provide written VOE, if necessary and update that information in the Gross Monthly Income section located on page 2 of the 1003. Requesting a Prior to Closing Processors are required to re-verify employment within 10 calendar days prior to closing. For this verification, a Verbal VOE is sufficient. Follow the directions laid out earlier in this job aid to print the VVOE. You can use the same phone number obtained with the initial VOE to call the employer again. Call the employer and obtain the information on the form. Be sure to fill the form out in its entirety. Only current employment is required to be re-verified. Page 10 of 11
Once the VVOE is completed, signed and dated upload the form to the VVOE Borrower or VVOE Co-Borrower placeholder in the efolder. PLEASE NOTE: If after calling to complete the VVOE you find that the borrower no longer works for their employer, the loan will not be able to close. Contact your Underwriter, Closer and Loan Officer and to determine the next course of action. Page 11 of 11