Written Verification of Employment (WVOE) Guide
What is a verification of employment?
A verification of employment (or verification of employment and income) is when we validate an applicant’s work history and confirm information reported on the loan application with the applicant’s employer.
There are two kinds of verification of employment:
Written verification of employment, and
Verbal verification of employment.
Employment verification during escrow
There are three major steps to follow when ensuring that all employment in a client’s application is properly completed after the client goes into contract and before closing:
Complete the reverse search (or 411) and upload the results to Encompass;
Complete verifications of employment and income (written or verbal) for each employer listed in the application, and
Re-verify current job(s) prior to closing.
Written verifications of employment (WVOE)
Written verifications of employment are completed by the employer. We can complete verifications of employment in two major ways:
Fannie Mae form 1005, or
Third-party written verifications.
Fannie Mae form 1005
The Fannie Mae form 1005 is the template used in standard verifications of employment and income. The form is sent to the employer to complete. It can be filled out by the borrower’s supervisor, Payroll, or HR.
The WVOE form must be filled out completely. If a field does not apply, the authorized contact must write N/A in that field. If a mistake is made, a new form must be completed as lenders cannot submit verifications with errors, mark-outs, scratch-outs, or white-out.
Written verifications of employment must always be uploaded to the file alongside a proof of its source (email, fax, etc.).
The Fannie Mae form 1005 is divided into four parts:
Part I – Request
Part II – Verification of Present Employment
Part III – Verification of Previous Employments
Part IV – Authorized Signature
Check the separate Encompass: Printing the WVOE job aid for instructions on how to complete and print the Fannie Mae form 1005 from Encompass.
Note: When providing Fannie Mae form 1005 as verification of employment, evidence of direct receipt from authorized employer representative must be provided and uploaded alongside the Written VOE.
Part I – Request
Part I – Request includes employer, lender, and borrower information.
To (name and address of employer): Must match the name of the employer on the pay stubs and the W-2s.
From (name and address of lender): Must be complete. It is automatically completed when the WVOE is printed directly from Encompass.
Signature of lender: Must be signed by the requestor.
Title: Must be completed by the requestor.
Date: Must not be later than the date on Part IV §28.
Lender’s number: Must match the loan number on file.
Name and address of applicant: Must match the borrower’s name and address on file.
Signature of applicant: If the last four digits of the borrower’s social security number are listed here, they must match the social security number on file.
Part II – Verification of Present Employment
Part II – Verification of Present Employment must be completely filled out if the employer is a current employer. If the employer cannot disclose some of the information requested, the field must still be filled out with an N/A.
Applicant’s date of employment: Must be consistent with Part II §12B YTD income listed if the hire year is the current calendar year.
Present position: Must match the position listed on file and in the pay stubs. Not all pay stubs list the employee’s position.
Probability of continued employment: Must have positive or affirmative verbiage. Examples of the language expected are yes, 100%, good, likely, great, or N/A.
Current gross base pay and gross earnings table: This section must be completely filled out.
§12A must be filled out with the employee’s pay amount and corresponding pay frequency. If the pay frequency is not listed, the Other box must be checked, and the frequency should be specified. The pay amount must match the pay stubs and W-2s (take into account any pay increase amount and date listed in Part II §18-19).
§12B must be completely filled out with the breakdown of the employee’s gross earnings for the current year (YTD), and the last two years (if the employee was employed during any of those years). Income must be broken down into base pay, overtime, commissions, and bonus, with the sum of the year’s gross earnings at the bottom. If overtime and bonus are not listed in this section, the boxes in Part II §14 must be checked No.
The Year to Date Column must match the latest pay stub. The Thru line must match the Period End Date of the last pay stub.
The Past Year Columns gross earnings must be broken down and the totals must match those years’ W-2s wages.
For military personnel only: This section should only be completed if the employee is military personnel.
If Overtime or Bonus is applicable, is its continuance likely? An option must be checked for both Overtime and Bonus. If No is checked for either Overtime or Bonus, that income will not be able to be used for the purposes of calculating qualifying income, even if it is listed in the WVOE Part II §12B or the pay stubs.
If paid hourly – average hours per week: If the employee is paid hourly, verify the weekly hours listed with an income calculation using the weekly hours listed and the hourly pay for YTD (take into account any pay increase amount and dates for this year if listed on Part II §18-19).
Date of applicant’s next pay increase: If the employee has no scheduled future pay increase, this can be filled out with an N/A.
Projected amount of next pay increase: If the employee has no scheduled future pay increase, this can be filled out with an N/A.
Date of applicant’s last pay increase: If the employee has not received a pay increase, this can be filled out with an N/A.
Amount of last pay increase: If the employee has not received a pay increase, this can be filled out with an N/A.
Remarks (if employee was off work for any length of time, please indicate time period and reason): If there was any event that affected the employee’s earnings, or any clarifications that need to be made pertaining the employment status, those must be listed in this section.
Part III – Verification of Previous Employments
Part III – Verification of Previous Employments must be completely filled out if the employer is a previous employer. On 23 Salary/Wage at Termination the employer must fill out the breakdown and select the frequency of the salary specified (year, month, week).
Date hired: Must be completed with the exact date of hire, including day, month, and year.
Date terminated: Must be completed with the exact date of release, including day, month, and year.
Salary/wage at termination: One of the three pay frequencies listed (year, month, or week) must be marked, underlined, or circled. The pay amount per the frequency listed must be broken down below by Base pay, Overtime, Commissions, and Bonus. Verify the total amount with the employee’s W-2s.
Reason for leaving: Must be completed. If the employer does not have this information, this can be filled out with an N/A.
Position held: Must be completed.
Part IV – Authorized Signature
Part IV – Authorized Signature must be completely filled out by the employer’s authorized representative. Examples of authorized representatives are members of the Human Resources, Payroll, or Accounting departments, managerial staff, or the employee’s supervisor.
Signature of employer: Must be signed by the employer’s authorized representative.
Title (please print or type): Must be completed by the employer’s authorized representative.
Date: Must not be earlier than the date in Part I §5.
Print or type name signed in Item 26: Must be completed by the employer’s authorized representative.
Phone No: Must be completed by the employer’s authorized representative.
Third-party written verifications
On occasion, employers use third-party verifiers to complete verifications of employment and income and take some of the workload from Human Resources, Payroll, or other administrative personnel.
The most commonly used third-party verifier is The Work Number by Equifax. Other third-party verifiers include Thomas & Company, CCC Verify, Verify Fast, Vault Verify, Truework, and uConfirm.
Each third-party verifier uses a different system and requires an account before verifications can be ordered. Make sure to complete the sign-up process whenever you must use a third-party verifier as the account validation process may take several business days to be completed.
Note: You can complete a verification through The Work Number via Encompass. Check the separate Encompass: Ordering EVS or TWN job aid for instructions on how to order it from Encompass.
Third-party verifications have a cost to the borrower or to the lender. If the borrower will pay for it out of their own pocket, they must fill out a credit card authorization form so the lender can complete the verification.
Check with your branch if you should prepare a verification invoice for third party verifiers. This may change from state to state.
