The Benefits of Employment History Insights Amidst Volatile Labor Markets

This year, mortgage lenders have competed with increasing interest rates, irregular markets,
regulatory compliance, and competition. An evolving work force and erratic market have made
an uncertain landscape even more challenging. Consumers are changing where and how they
work – with many diverting away from staying with one employer for long tenures. It is believed
the shift was perhaps triggered by the coronavirus pandemic and the resulting move to remote
work, the demand for more flexibility, or new job opportunities in new markets. Reason aside,
the actions have led to mortgage lenders seeing a rise in applications from borrowers with more
untraditional employment and income profiles which can deter the likeliness of approval and
underwriting process.

In most instances, a mortgage loan process from application to closing can take weeks and
sometimes months. A particular barrier may include employment verification as the prospective
loan moves through the origination process. Lenders take various approaches to verify
employment. Data may be used and collected from multiple, often disconnected sources. This
might include traditional and alternative sources like bank transaction data, consumer-
permissioned data, and consumer-provided documents (ex., pay stubs, W-2s). They may also
pursue alternative verification companies to get the answers they need—extending an already
tedious process. Sadly, these employment verification methods negatively impact the borrower
experience and waste time and resources.

In a recent MortgageOrb article, Ashley Wood discusses the economic conditions mortgage
lenders have contended with, the importance of creating an expanded view of borrowers with
VOIE data, changes in traditional employment, and mitigating risk.