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#1867113 - 10/31/13 04:35 PM
Re: ATR and employment status verification
Beth175
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Joined: Jul 2001
Posts: 83,371
Galveston, TX
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ii. The employer's confirmation of current, ongoing employment status.
Note: Creditors may assume that employment is ongoing if a consumer's employer verifies current employment and does not indicate that employment has been, or is set to be terminated. Creditors should not rely upon a verification of current employment that includes an affirmative statement that the employment is likely to cease, such as a statement that indicates the employee has given (or been given) notice of employment suspension or termination.
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#1867144 - 10/31/13 05:11 PM
Re: ATR and employment status verification
Beth175
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Posts: 83,371
Galveston, TX
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Regardless, I guess I would have to ask how else could you possibly "verify" employment without asking the employer??? I can be done orally, if the employer will do it that way.
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#1867234 - 10/31/13 06:41 PM
Re: ATR and employment status verification
Beth175
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Posts: 83,371
Galveston, TX
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All paystubs do is to verify past employment thru the end date on the paystub. It cannot and does not indicate current employment.
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#1871625 - 11/15/13 04:56 PM
Re: ATR and employment status verification
Beth175
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Gold Star
Joined: Apr 2012
Posts: 369
Yaven IV
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We have employers in our area that will not fill out a VOE form and will not verify employment verbally. Checking this is not a new practice for us, but now because it is required we can no longer accept a non-response. In this case, how can we document the file that we complied.
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#1871629 - 11/15/13 04:57 PM
Re: ATR and employment status verification
Beth175
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Joined: Jul 2001
Posts: 83,371
Galveston, TX
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You tell the applicant that you cannot proceed because their employer will not cooperate and get them to tell their employer that the employer is preventing them from buying a house because of their asinine policy. I can't imagine this will last for long.
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#1871653 - 11/15/13 05:24 PM
Re: ATR and employment status verification
Beth175
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Gold Star
Joined: Apr 2012
Posts: 369
Yaven IV
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I think I will put your exact words in our procedures!!! Ha!
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#1871702 - 11/15/13 06:20 PM
Re: ATR and employment status verification
Beth175
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Platinum Poster
Joined: Mar 2012
Posts: 574
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There are 3rd Party Vendors that may be able to help, but they will cost the employee, i.e. The Work Number is one such.
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#1871730 - 11/15/13 07:04 PM
Re: ATR and employment status verification
Beth175
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10K Club
Joined: Jul 2001
Posts: 83,371
Galveston, TX
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So, what makes you think the employer is going to respond to a third party over responding directly to the bank?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1871732 - 11/15/13 07:09 PM
Re: ATR and employment status verification
Beth175
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Platinum Poster
Joined: Mar 2012
Posts: 574
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Not sure they will but we have encountered some employer that will only verify through a third party. Usually, the third party will tell you if they can verify the information from certain employer.
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#1871888 - 11/15/13 10:16 PM
Re: ATR and employment status verification
Beth175
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Joined: Oct 2000
Posts: 40,086
Cape Cod
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Patently ridiculous, but ...
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#1872031 - 11/18/13 03:18 PM
Re: ATR and employment status verification
Beth175
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Platinum Poster
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Posts: 574
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#1874814 - 11/27/13 07:11 PM
Re: ATR and employment status verification
Beth175
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100 Club
Joined: Dec 2010
Posts: 178
Midwest
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Sorry to hijack but I have a few follow up questions along this topic:
What are you all doing for verifications of employment for self-employed applicants? Often we have a small business owner and the business phone number is the applicant's home or cell phone; or there is nobody to verify that the applicant is still "employed" by his/her business other than themself/spouse.
In my past life as a secondary market lender, we would try to get verifications of the phone # used online (google, website - etc) and call that # to verify - if the applicant answered and all the other pieces lined up we called it good. As a resource, I looked at the FNMA selling guides and found nothing specific on this. I suppose we could get a letter from their accountant; but what if the business owner self-prepares? For income on self-prepared taxes we're requiring tax transcripts again that will verify income; not necessarily employment.
Lastly, Appendix Q says we need P&Ls for S/E borrowers, but in the Small Entity Compliance Guide pg. 20 where it uses the cattle rancher example and says that the P&L is reliable if a 3rd party prepared them. What if the applicant uses QuickBooks and prepares their own financials? Is the guide combined w/Q suggesting that we require a P&L; but can only rely on it if it's verified w/a 3rd party?
(Please note I'm asking specifically about employment verification not income verification.)
TIA!
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#1876364 - 12/05/13 05:50 PM
Re: ATR and employment status verification
ProfitDefender
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Member
Joined: Jun 2011
Posts: 64
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Sorry to hijack but I have a few follow up questions along this topic:
What are you all doing for verifications of employment for self-employed applicants? Often we have a small business owner and the business phone number is the applicant's home or cell phone; or there is nobody to verify that the applicant is still "employed" by his/her business other than themself/spouse.
In my past life as a secondary market lender, we would try to get verifications of the phone # used online (google, website - etc) and call that # to verify - if the applicant answered and all the other pieces lined up we called it good. As a resource, I looked at the FNMA selling guides and found nothing specific on this. I suppose we could get a letter from their accountant; but what if the business owner self-prepares? For income on self-prepared taxes we're requiring tax transcripts again that will verify income; not necessarily employment.
Lastly, Appendix Q says we need P&Ls for S/E borrowers, but in the Small Entity Compliance Guide pg. 20 where it uses the cattle rancher example and says that the P&L is reliable if a 3rd party prepared them. What if the applicant uses QuickBooks and prepares their own financials? Is the guide combined w/Q suggesting that we require a P&L; but can only rely on it if it's verified w/a 3rd party?
(Please note I'm asking specifically about employment verification not income verification.)
TIA! I would like to hear a response on this as well. Good question
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#1876368 - 12/05/13 05:58 PM
Re: ATR and employment status verification
Beth175
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10K Club
Joined: Jul 2001
Posts: 83,371
Galveston, TX
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Are you talking continued employment status verification or income verification. They are talking income verification in that section.
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#1876394 - 12/05/13 06:33 PM
Re: ATR and employment status verification
Beth175
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Member
Joined: Jun 2011
Posts: 64
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employment status verification for self employed
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#1878670 - 12/13/13 09:38 PM
Re: ATR and employment status verification
Beth175
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Diamond Poster
Joined: Aug 2012
Posts: 1,700
48.934476, -114.343735
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Don't expect to receive it in writing but if you put in a request to the CFPB, they will call you back and answer this question.
If you believe that the paystub(statement) is reasonably reliable, you may use that for your verification. You need not obtain a verbal or written VOE if you don't want to. But you may (be sure to document it).
Source: An un-named CFPB staff attorney.
FYI, for what it is worth. Don't rely on me. Make the phone call yourself and get a name to write down.
**** This is in reply to the OP; not the issue of self employed verifications****
Last edited by Norman Paperman; 12/13/13 09:40 PM. Reason: clarification as to application
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#1878983 - 12/16/13 07:26 PM
Re: ATR and employment status verification
ProfitDefender
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100 Club
Joined: Dec 2013
Posts: 238
Land of Oz
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Sorry to hijack but I have a few follow up questions along this topic:
What are you all doing for verifications of employment for self-employed applicants? Often we have a small business owner and the business phone number is the applicant's home or cell phone; or there is nobody to verify that the applicant is still "employed" by his/her business other than themself/spouse.
In my past life as a secondary market lender, we would try to get verifications of the phone # used online (google, website - etc) and call that # to verify - if the applicant answered and all the other pieces lined up we called it good. As a resource, I looked at the FNMA selling guides and found nothing specific on this. I suppose we could get a letter from their accountant; but what if the business owner self-prepares? For income on self-prepared taxes we're requiring tax transcripts again that will verify income; not necessarily employment.
Lastly, Appendix Q says we need P&Ls for S/E borrowers, but in the Small Entity Compliance Guide pg. 20 where it uses the cattle rancher example and says that the P&L is reliable if a 3rd party prepared them. What if the applicant uses QuickBooks and prepares their own financials? Is the guide combined w/Q suggesting that we require a P&L; but can only rely on it if it's verified w/a 3rd party?
(Please note I'm asking specifically about employment verification not income verification.)
TIA! We always do SE verifications by a 3rd party source. Usually it can be done via the state business websites (saying the business is active) but if we can't find it there, we will ask the borrower for a 3rd party receipt/invoice for sale of services by the business (Ex: sale of grain receipt from buisness to Co-op). We have also called and spoke with the Co-Op to confirm existence of the business.
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#1879041 - 12/16/13 08:45 PM
Re: ATR and employment status verification
Beth175
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Member
Joined: Jun 2011
Posts: 64
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Thanks MonicaMc, I wondered about doing just that. It seems logical.
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#1879114 - 12/16/13 10:09 PM
Re: ATR and employment status verification
Beth175
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New Poster
Joined: Jul 2013
Posts: 9
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We've had to request a recent bid or invoice from a self-employed applicant because there was nothing else available for verification of the business.
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#1881538 - 12/26/13 09:45 PM
Re: ATR and employment status verification
ProfitDefender
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New Poster
Joined: Nov 2012
Posts: 7
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Lastly, Appendix Q says we need P&Ls for S/E borrowers, but in the Small Entity Compliance Guide pg. 20 where it uses the cattle rancher example and says that the P&L is reliable if a 3rd party prepared them. What if the applicant uses QuickBooks and prepares their own financials? Is the guide combined w/Q suggesting that we require a P&L; but can only rely on it if it's verified w/a 3rd party?
I'm curious what everyone thinks of this from an income verification perspective. For our self-employed borrowers, will we have to get P&L and balance sheet statements from a third-party?
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#1881571 - 12/27/13 01:30 PM
Re: ATR and employment status verification
Beth175
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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My understanding is that for it to be considered 'verified' income, it must be verified by a 3rd party in order to rely on a particular document.
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