3 Reasons Manual VOE's Are Here to Stay
The rapid rise in technology over the past few years has led to countless tasks and jobs being automated by computers, robots, and algorithms. The next few decades will see this phenomenon increase exponentially. The mortgage industry is not immune to the impact of technology. Our industry boasts underwriting software that eliminates countless hours from the lending process, software that allows you to obtain a copy of the borrower’s asset statements (with permission of course), and too many other examples to be listed here.
In recent years we’ve seen the rise of websites & applications that can automatically verify employment & income for lenders across the country. These programs are integrated with an employer’s HR records, and allow lenders to obtain an instant snapshot of the employee’s details & earnings. These are great tools, that have helped slash precious time off of originations.
However, while the reach of these companies is growing, automated verifications will never be able to capture the entirety of the market. Here’s why
Small Companies: High Risk, Little Reward
Large corporations with hundreds of employees get bombarded with verification of employment requests. An employee applies for a mortgage: VOE request. An employee decides to rent a new apartment: VOE request. It’s a consistent & tiring process for HR managers in any respectably sized company.
However, there are small companies that get so few verification requests, that even taking the time to sign up for one of the automated services isn’t nearly worth their time. As someone who has performed countless verifications, it’s not uncommon to reach a receptionist, HR personnel, or even an owner of a company who has never heard of a VOE before. Therefore, automated services will provide little to no value to their company. Couple this with the increased risk factor of giving another company access to your records, and most small business owners will say “no thanks.”
Businesses Left Behind by Technology
It might be hard to believe that in 2018 a company could survive without a website. Even more horrifying, not being unable to find a single record of a company through an extensive Google search. If you asked a skilled verifier how often this happens, you might be a bit shocked to hear the response.
The truth is, there are countless businesses out there that either don’t try to be found, or don’t need to be found. They are woodworking companies that get all their business from word of mouth. They are borrowers who get paid to work on the family farm. Trucking companies that consist entirely of one owner and one driver, and the list goes on.
Many of these companies don’t have computerized records to even integrate with. Nor do they have any desire to!
Those Who Don’t Trust the Idea
Lastly, there are going to be businesses out there that just plain don’t like the idea of giving another company access to their sensitive data. Sure, they might be a mid-sized company that gets regular VOE requests, but that’s what they pay their HR team for. With any emerging technology, there will always be those that are hesitant or resistant.
While technology & regulations are always changing (especially in this industry), it is safe to say that manual verifications of employment will be here for the long haul. Has technology made verifications easier? Of course! However, the human element still very much matters, and will continue to be important for as long as lenders want to originate with total confidence.
To learn more about manual verifications of employment, give us a call today!