Tuesday, December 9, 2008

How Did the Lender Know My Buyer Quit His Job?

Here's another question from a recent presentation we gave:

Q: "I had a buyer quit his job right before a closing and the deal fell apart. How did the lender know he quit his job?"

A: Every lender calls the borrowers' employer right before the closing (generally within 5 days of the closing) to see if the borrower is still employed. This is one of the conditions on all loan approvals that must be satisfied before the loan can fund.

The verification is known as a verbal verification of employment and is done over the phone. It does not include income information, just the borrower's start date and position, and whether they are still employed.

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