Verification of income and employment (VOE) is a crucial step in your loan origination process. It allows you to see if your applicants possess sufficient income and employment stability to afford their loans, playing a vital role in your risk mitigation.
The importance of VOE has remained the same since the dawn of mortgage lending. VOE methods, on the other hand, have evolved significantly over the past few decades. One of the latest innovations in the VOE landscape is consumer permission data.
In this article, we’ll review how this VOE method works and what benefits it can bring to your mortgage lending business. After that, we’ll outline the steps for integrating it into your Cascade VOE workflow.
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What is Consumer Permission Verification of Income and Employment?
Within the VOE landscape, there are three main methods you can choose from: manual, instant, and consumer permission. Here’s a brief overview of each of these methods:
- Manual VOE – Manual VOE has been used by mortgage lenders for decades. With this method, you or your staff must reach out to your applicants’ employers to verify their salary and employment duration. While straightforward, this process can take several days or weeks. Even if you get in touch with an applicant’s employer quickly, they may misreport information by mistake. Since manual VOE is saddled with so many issues, mortgage technology providers have developed new verification methods, including instant VOE and consumer permission VOE.
- Instant VOE – Instant VOE allows you to access applicants’ income and employment history instantaneously from third-party providers’ databases, which contain millions of employment records obtained from HR departments and payroll providers. Two popular instant VOE vendors are Experian Verify and The Work Number. Instant VOE yields the fastest verifications, though it often costs more than consumer permission alternatives.
- Consumer Permission VOE – Consumer permission VOE empowers applicants to control access to their personal data while facilitating fast, affordable verifications. With this method, lenders request verifications from consumer permission VOE vendors. After that, the vendor contacts the applicant and requests access to their employers’ payroll service or their personal financial accounts. Once the applicant logs in and authorizes access, their lender can view the data they need (and nothing more), facilitating secure verifications in seconds. Consumer permission VOE is growing in popularity at the moment, thanks to its many benefits.
6 Benefits of Consumer Permission Verification of Income and Employment
Now that you know the basics about the three types of VOE, let’s explore the advantages of leveraging consumer permission VOE in your verification process.
#1 Consumer Permission VOE Supports a Borrower-Driven Experience
Today’s borrowers expect a seamless lending experience free from unnecessary paperwork or lengthy turnaround times. Consumer permission VOE can remove the friction from obtaining verifications for applicants and lenders alike.
That’s because consumer permission VOE doesn’t involve any paperwork or complicated document uploads. All the required data is shared instantaneously via API. As a result, your applicants won’t need to go through the hassle of gathering their W2s and pay stubs. They can simply share access to their digital data in a few clicks.
#2 Consumer Permission VOE Empowers Applicants to Manage Access to Their Data
Along with seamless service, today’s consumers are increasingly wary about data privacy. Around the world, two out of three consumers feel that tech companies have too much control over their data. As concerns about data privacy grow, many consumers want to reclaim ownership of access to their data.
More than any other verification method, consumer permission VOE puts control back into applicants’ hands. It allows them to determine what data they share and who they share it with, as opposed to having their information funneled into a massive database or requested behind their backs from their employers. By including consumer permission VOE in your lending process, you can reassure borrowers that you care about their data privacy.
#3 Consumer Permission VOE is Cost-Effective
Instant VOE is a staple in many lenders’ workflows because it’s so fast and frictionless. However, it can be more costly than consumer permission alternatives. With the rise in loan origination costs, finding ways to save money is more important than ever.
To get the best of both worlds on a budget, consider requesting verifications from vendors in a strategic order. For instance, you can order from your instant VOE vendor first to take advantage of its speed. If this vendor doesn’t deliver a hit, you can move onto a consumer permission VOE vendor next, as opposed to trying more instant VOE vendors. Doing so can be more affordable than using multiple instant VOE providers in a row.
#4 Consumer Permission VOE Can Fill in the Gaps of Instant VOE
Instant VOE databases contain millions of employment records, but these records don’t necessarily cover every mortgage applicant. Consumer permission VOE can fill in the gaps when your instant VOE request is unsuccessful. In turn, it can boost your hit rate and limit your manual VOE workload.
#5 Consumer Permission VOE Mitigates the Need for Manual Verifications
Speaking of manual VOE, consumer permission VOE can reduce your reliance on manual methods significantly. As a result, your team can spend less time contacting employers and allocate a greater portion of their workweek to revenue-generating activities, such as:
- Developing stronger relationships with your leads, applicants, and borrowers.
- Making strategic connections with local realtors and other real estate professionals.
- Upgrading your marketing and advertising strategies.
- Expanding your library of educational resources.
- Ensuring an exceptional borrower experience.
Another benefit of minimizing manual VOE is that you eliminate the chance of human error or fraud. While manual VOE relies on employers’ accuracy and honesty, consumer permission VOE gives you access to high-quality data directly from the source.
#6 Consumer Permission VOE Can Verify Alternative Forms of Income
In recent years, gig work and side hustles have become increasingly popular. As a result, many applicants may not have all of their income recorded in traditional payroll systems, increasing the chances that your instant VOE vendors will come up short.
Luckily, consumer permission VOE vendors can verify a broader range of workers’ income and employment history. These applicants simply need to share data from their financial accounts, as opposed to an employer’s payroll database.
Learn more: How to Qualify Self-Employed Business Owners and Contract Workers
How to Integrate Consumer Permission VOE into Cascade VOE
Cascade VOE is our automated verification solution at Certified Credit. It features a unique rules-based engine that controls the flow of your vendor order requests, enabling you to order reports from one vendor after another automatically until one yields a hit.
When you start using Cascade VOE, you can customize your cascade of vendors and arrange them in your preferred order. As a Cascade VOE user, you’ll have access to a wide variety of instant VOE and consumer permission VOE options.
If you want to be strategic, consider positioning your favorite instant VOE provider first within your cascade. After that, you can add a consumer permission vendor to serve as a catchall for any applicants who fall through the cracks of your initial instant VOE vendor.
How to Use Cascade VOE
Once you’ve set up Cascade VOE, you can order verifications in a few clicks. Just follow these three steps:
- Submit your VOE order for your applicant.
- Allow Cascade VOE to run through your selected VOE vendors one by one.
- Monitor your VOE’s progress from your POS/LOS system or wait for email/text alerts letting you know the process is complete.
In many cases, Cascade VOE can verify your applicant’s income and employment in minutes, expediting your turnaround times and allowing you to move on to the next stages of loan generation more efficiently.
If your cascade of vendors can’t yield a hit for a certain applicant, the VOE request will immediately be sent to Certified Credit’s manual VOE team, which has an impressive track record of completing over 50% of verifications within two days. With our team managing manual VOEs on your behalf, you can stay focused on other critical aspects of your mortgage lending business.
What Are the Benefits of Cascade VOE?
Like consumer permission VOE, Cascade VOE boasts many benefits. Our Cascade VOE users enjoy:
- Seamless integration between their VOE data and existing LOS/POS systems
- Accurate verifications that are free from human error
- Lower costs, since they only pay when Cascade VOE returns a hit
- More predictable costs, which can be passed onto their applicants compliantly
- Integration with milestone ordering, which allows them to automate VOE orders at a strategic position within their loan origination process
Unlock the Benefits of Consumer Permission VOE With Certified Credit
In a world where consumers increasingly value speed, convenience, and data security, consumer permission VOE has a lot to offer. Leveraging it in conjunction with Cascade VOE can amplify both tool’s advantages.
If you want even more workflow optimization solutions, explore our full range of offerings at Certified Credit. In addition to Cascade VOE, we provide:
- Affordable credit reports
- Automated lead generation and borrower retention tools
- Automated prequalification
- Automated undisclosed debt monitoring
- Automated credit supplements
- Flood zone determinations
- Fraud and risk support
- Settlement services
Ready to take advantage of the benefits of consumer permission VOE? Schedule a credit consultation with our team today to learn more.
