B3-3.1-07, Verbal Verification of Employment (03/06/2024)

Verbal Verification of Employment:

• The lender must independently obtain a phone number and, if possible, an address for the borrower's employer. This can be accomplished by using a telephone book, the Internet, directory assistance, or by contacting the applicable licensing bureau.

• The lender must contact the employer verbally and confirm the borrower's current employment status within 10 business days prior to the note date.

  Note: If the employer confirms the borrower is currently on temporary leave, the lender must consider the borrower “employed.” See B3-3.1-09, Other Sources of IncomeB3-3.1-09, Other Sources of Income, for details on temporary leave.

• The conversation must be documented. It should include the following:

  • name and title of the person who confirmed the employment for the lender,

  • name and title of the person who completed the verification for the employer,

  • date of the call, and

  • the source of the phone number.

Alternative Methods to Verify Employment:

• The lender can obtain a written verification confirming the borrower’s current employment status within 10 business days prior to the note date. The written documentation must include the name and title of the person who completed the verification for the employer.

• The lender can obtain an email exchange with the borrower's employer from the employer's work email address within 10 business days prior to the note date.

  • The lender must conduct additional due diligence to confirm that the email address for the employer is accurate. Examples of due diligence include, but are not limited to, searches of domain name on employer website (review for match to employer email address), employer directory on the internet, or other professional networking or business profile websites.

  • The email exchange must include borrower's name and employer's name; name, title, and work email address of the individual contacted at the employer; date of contact; and borrower's current employment status.

• Within 15 business days prior to the note date, the borrower can provide either

  • the most recent available paystub as of that date that, meets the requirements in  B3-3.1-02, Standards for Employment DocumentationB3-3.1-02, Standards for Employment Documentation; reflects information for the most recent expected pay period based on the date it is provided and the borrower's pay cadence; and does not include any information indicating the borrower may not be actively employed.​​​​​​

• Bank statements dated no earlier than 15 business days prior to the note date that

  • meet the requirements in  B3-4.2-01, Verification of Deposits and AssetsB3-4.2-01, Verification of Deposits and Assets,

  • reflects information for the most recent expected pay period based on the date of the statement and the borrower's pay cadence, and 

  • does not include any information indicating the borrower may not be actively employed.

• If the borrower is a union member who works in an occupation that results in a series of short-term job assignments (such as a skilled construction worker, longshoreman, or stagehand), and the union facilitates the borrower’s placement in each assignment, the lender may obtain the verbal VOE from the union.

• If the employer uses a third-party employment verification vendor, the lender must obtain written verification from the vendor of the borrower’s current employment status within the same time frame as the verbal VOE requirements.

Note: Because third-party vendor databases are typically updated monthly, the verification must evidence that the information in the vendor's database was no more than 35 days old as of the note date.

When employment is validated by DU, DU includes in its assessment the age of the information in the vendor’s database. The DU message will include a date by which the loan must close. This may differ from the age of data and 10 business day requirements above. Compliance with the DU message satisfies the requirement for completing the verification of employment. See B3-2-02, DU Validation ServiceB3-2-02, DU Validation Service for additional information.

When employment is initially validated by the DU validation service using an asset verification report, but the loan will not close by the "Close by Date" stated in the validation message, an alternative method of reverifying employment is permitted using a supplemental asset report. See  B3-2-02, DU Validation ServiceB3-2-02, DU Validation Service for additional information.

If the borrower is in the military, in lieu of a verbal or written VOE, the lender must obtain either

• a military Leave and Earnings Statement dated within 120 calendar days prior to the note date, or

• a verification of employment through the Defense Manpower Data Center. See  E-1-02, List of ContactsE-1-02, List of Contacts for additional information.

Requirements:

• The lender must verify the existence of the borrower's business within 120 calendar days prior to the note date

  • from a third party, such as a CPA, regulatory agency, or the applicable licensing bureau, if possible; or

  • by verifying a phone listing and address for the borrower's business using a telephone book, the internet, or directory assistance.

• The lender must document the source of the information obtained and the name and title of the lender's employee who obtained the information.