In order to verify that a person is indeed working for a company, mortgage lenders and banks require a borrower to fill in an employment verification form. Through this form, the lender can be sure to determine correctly not only the income history of the borrower, but also the stability of his job. This is a very important process, as it establishes exactly the risk that the bank is taking by lending money to a person.

When somebody applies for a loan, the lender sends a Written Verification of Employment mail to all the employers of the borrower within the last two years, both current and previous. An authorized representative of the employing company will fill in this form, which must contain information regarding the employment period, the remuneration received and the position held by the borrower within that company. This form will be then sent back to the lender, and compared with the income documentation and the loan application.

The information written in the employment verification form must be correct and the same as the information written in the loan application and income documentation.

However, this is the not the only verification conducted by the bank or mortgage lender. After the loan or mortgage has been approved, the lender will conduct a verbal verification. Thereby, all the current employers of the borrower will be phoned and asked for further information about the borrower. The latter step is made in order to ensure that the borrower has not resigned or has been fired from the job after submitting the application, before the approval of the loan.

The guidelines for the verification of employment are different from one bank to another, as well as from one type of borrower to another. For example, the employment verification form for self-employed borrowers is different from that for people working for a boss. Obviously, the form must not be completed by the borrower himself. Therefore, a letter from the Certified Public Accountant is required to certify that the borrower is making enough money and will be able to pay back the loan, but also that the accountant has knowledge of the employee.

No Income No Asset, Stated Income or No Doc loans also require different guidelines for the verification of employment.

The personal information of the employee will not be required in the employment verification form, by any bank or mortgage lender, so you can be sure that your employee id number, social security number or driver’s license number will not be needed.

Moreover, the reason for which you have left the previous work places will not be specified in this form, so this will remain private as well. You have no reason to be concerned about your privacy simply because you are applying for a loan.

This verification of employment is not a reason of concern for the borrower. It is simply a safety measure taken by the bank or mortgage agency, verifying that the information given by the loan applicant is correct and can be taken into consideration.

The employment verification form contains all the information about a borrower’s financial situation that a bank must have in order to approve a loan.