Now that the Consumer Financial Protection Bureau’s (CFPB) Ability-to-Repay/Qualified Mortgage rule has been effective for two years, technology companies are working to provide tools that enable lenders to verify borrower information. The latest tool is VOE Xpress, a web-based solution developed by ComplianceEase that marries verification of employment, or VOE, and speed.
According to ComplianceEase, a division of LogicEase Solutions Inc., that provides automated compliance solutions to the financial services industry, VOE Xpress validates the borrower’s employment and income information via online search engines, employment verification databases and verbal and/or written confirmation from the borrower’s employer.
The solution then generates verification reports containing a borrower’s name, employment history, employment dates, employment status, job title and detailed compensation data, including wages, overtime, commissions and bonuses, if applicable. In some cases, salary history and expected future pay increases are also included in the report.
VOE Xpress users can place orders and download the results from ComplianceEase’s website or receive them within their proprietary production platform if they integrate it with ComplianceEase’s platform.
Al Ogrodski, senior vice president of Solution Strategy at ComplianceEase, said VOE Xpress enhances workflows and improves efficiency, and noted that “outsourcing the VOE functions to an industry leading compliance expert can further reduce costs and mitigate regulatory and credit risk.”
The CFPB’s ATR/QM rule took effect on Jan. 10, 2014. The rule requires all creditors to “make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling.” The rule established a 43-percent debt-to-income ratio threshold for qualified mortgages, as well as a temporary safe harbor for QMs with some subprime loans with more flexible underwriting requirements.
VOE Xpress provides independent authentication of borrower employment and income history to demonstrate the borrower’s ability to repay a mortgage as required by both the CFPB’s rule and government sponsored enterprises and investors.
“Documenting evidence of compliance using verification of employment is a foundational best practice for all lenders,” Ogrodski said.