Definition & Meaning of the WVOE Form
A WVOE form, or Written Verification of Employment, is a document used primarily in the mortgage industry. This form serves as a confirmation from an employer regarding a borrower's job status, salary, and employment history. Lenders utilize the WVOE to verify income, particularly for individuals with non-traditional income sources, such as commissions or bonuses. This form often replaces the need for tax returns or W-2s in specific loan programs, making it essential for borrowers looking to secure financing.
The WVOE typically includes details such as:
- Employment dates
- Job title and position
- Pay structure, including salary, bonuses, and commissions
- Year-to-date earnings
By providing a comprehensive picture of a borrower's financial situation, the WVOE helps lenders assess the stability of income during the underwriting process.
How to Use the WVOE Form
To effectively use the WVOE form, borrowers must first understand its purpose and the information required. The process begins when a borrower applies for a mortgage and the lender requests verification of employment. Here are the steps involved:
- Request the Form: The borrower should inform their employer about the need for a WVOE.
- Employer Completion: The employer fills out the form, providing necessary details about the employee's job and income.
- Submission to Lender: The completed WVOE is sent directly to the lender, ensuring confidentiality and accuracy.
It is important for borrowers to communicate with their employer about the WVOE to avoid delays in the loan approval process.
How to Obtain the WVOE Form
Obtaining a WVOE form is straightforward. Borrowers typically do not need to fill out the form themselves; instead, they should follow these steps:
- Contact Your Employer: Inform your HR department or supervisor that a WVOE is needed for your mortgage application.
- Provide Necessary Details: Ensure your employer has all the information required to complete the form accurately.
- Follow Up: After a few days, check in with your employer to confirm that the WVOE has been completed and sent to the lender.
By maintaining open communication with your employer, you can facilitate a smooth verification process.
Key Elements of the WVOE Form
The WVOE form contains several critical components that lenders look for when assessing a borrower's financial stability. These elements include:
- Employee Information: Full name, job title, and employment dates.
- Income Details: Breakdown of salary, bonuses, and any commissions earned.
- Employer Verification: Signature and contact information of the employer or HR representative.
- Year-to-Date Earnings: This figure helps lenders understand the borrower's current earning capacity.
Each section of the WVOE is crucial for lenders to establish the borrower's income reliability and overall financial health.
Examples of Using the WVOE Form
Understanding how the WVOE form is used in real-world scenarios can clarify its importance. Here are a few examples:
- Non-Traditional Borrowers: A borrower who receives a significant portion of their income from commissions may use a WVOE to demonstrate their earning potential without relying solely on W-2s.
- Frequent Job Changes: For individuals with a history of changing jobs, the WVOE provides a clear overview of their employment history and income stability.
- Variable Income Situations: Borrowers who earn bonuses or have fluctuating income can present a WVOE to give lenders a complete picture of their financial situation.
These examples illustrate how the WVOE can be a valuable tool in the mortgage application process.
Legal Use of the WVOE Form
The WVOE form must be used in compliance with relevant laws and regulations. Here are key legal considerations:
- Confidentiality: The information provided on the WVOE must be kept confidential between the employer and the lender.
- Accuracy: Employers are legally obligated to provide accurate information on the WVOE to avoid potential legal repercussions.
- Authorization: Borrowers must authorize their employer to release employment information to the lender, typically by signing a release form.
Understanding these legal aspects ensures that both borrowers and employers are protected during the verification process.
Why the WVOE Form is Important
The WVOE form plays a crucial role in the mortgage application process for several reasons:
- Income Verification: It provides lenders with a reliable method to verify a borrower's income, especially for those with complex financial situations.
- Streamlined Process: By using the WVOE, borrowers can avoid extensive paperwork, making the mortgage application process more efficient.
- Loan Approval: A completed WVOE is often a requirement for loan approval, ensuring that lenders have the necessary information to assess risk.
Overall, the WVOE is essential for both borrowers and lenders to facilitate a smooth and successful mortgage application.
Steps to Complete the WVOE Form
Completing the WVOE form involves several key steps that both the borrower and employer must follow:
- Step One: The borrower requests the form from their employer, providing context for its necessity.
- Step Two: The employer fills out the form with accurate employment details, ensuring all sections are completed.
- Step Three: The employer submits the completed WVOE directly to the lender, maintaining confidentiality.
- Step Four: The borrower should follow up with both the employer and lender to confirm receipt of the form.
By following these steps, borrowers can ensure that the WVOE is completed correctly and submitted in a timely manner.
