Verifications of income and employment (VOEs) and credit reports are two cornerstones of the loan origination process. While essential, using outdated ordering practices to secure this critical data can inflate your operating costs and diminish your borrower experience.
In 2024, the average cost to originate a loan ranged from $6,900 to a whopping $16,500. As prices rise, so do borrower expectations. Today’s applicants increasingly demand swift, digitized service offerings from their mortgage lenders.
If you want to cut costs and delight borrowers, optimizing your ordering process can make all the difference. Below, we’ll examine the various impacts of your ordering practices and explore how tools like Cascade VOE and Smart Select can optimize them.
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The Importance of Your Ordering Process
Before approving a mortgage applicant, you need to make sure they possess the income, employment history, and creditworthiness to qualify for their loan. While VOEs and credit reports are necessary, some strategies for obtaining them are more expensive and tedious than others.
Here are just a few factors that can influence the cost and convenience of your ordering process:
#1 Choice of Providers
These days, you have more VOE providers to choose from than ever before. Some of the most popular options include:
- Instant-hit vendors, like Experian and The Work Number, which stand out for their speed. These vendors have access to massive employment databases, so they can often provide results for applicants in minutes.
- Consumer permission data (CPD) vendors, which allow borrowers to securely share access to their financial data. While these verifications aren’t instant, they can be completed in a few clicks. Better yet, they’re often more affordable and inclusive, enabling you to verify applicants who don’t have data in traditional payroll databases.
While both of these options are much faster than manual VOEs, one may be better suited for certain types of applicants than the other. Knowing when to use each type can help you maximize your verification’s speed, hit rate, and cost-effectiveness.
When it comes to credit reports, it’s equally important to work with reliable providers. At Certified Credit, our credit reports are affordable, customizable, and easy to read. We have everything from prequalification soft pulls to LQI-compliant Refresh Reports.
#2 Position Within Your Loan Origination Workflow
After shopping around for the best providers, you also want to analyze the positioning of your orders in your overall lending workflow. Ordering credit reports and VOEs too early or too late can unnecessarily inflate your costs. In some cases, late orders may even put your applicants’ at risk of delays and missed closing deadlines, which can seriously damage their borrower experience.
#3 Use of Automation
Ordering VOEs and credit reports manually can be time-consuming. These tedious tasks often disrupt more important things on your to-do list, from consulting with first-time homebuyers to managing your most complex loan scenarios.
Rather than juggling multiple VOE vendors and tracking order statuses from disparate systems, you can automate the entire process with a tool like Cascade VOE. Similarly, you can streamline your credit report ordering with the help of SmartSelect.
Optimize Your Ordering Process With Automated Solutions
Let’s take a look at how Cascade VOE and Smart Select can help you bring down costs and bolster your borrower experience.
What is Cascade VOE?
Cascade VOE is an automated VOE ordering solution that gives you more control and flexibility over your ordering process. Its key features include:
- Rules-based engine – Cascade VOE employs an advanced rules-based engine. In other words, it allows you to set the rules for how you want its software to make decisions about orders, including which providers to use and in what order.
- Wide range of VOE providers – Cascade VOE gives you access to some of the industry’s leading VOE providers, including a mix of instant-hit and CPD options. In turn, you can customize your cascade of vendors to suit your needs and budget.
- Seamless LOS integration – While manual verifications typically involve logging into specific provider’s systems, Cascade VOE lets you initiate orders and track verification statuses directly within your loan origination system (LOS).
- Text and email alerts – If you prefer automated alerts, Cascade VOE can send timely notifications via text or email to let you know when it has yielded a hit for a certain applicant.
- Manual verifications – Instant-hit and CPD providers can verify most applicants. For those that fall through the cracks, Certified Credit’s manual VOE team can quickly step in and close the gap. We complete over 50% of manual VOEs within two days.
- Milestone ordering – Cascade VOE can automate every aspect of your ordering process—aside from initiating the request. If you want to automate that part too, simply employ milestone ordering. This convenient solution automates Cascade VOE’s invitation requests for applicants after they complete certain milestones.
Thanks to these powerful features, Cascade VOE can reduce your verification turn times considerably. Better yet, it allows you to skip the hassle of tracking multiple vendors, navigating disparate systems, or manually reaching out to employers on your own.
Along with expediting your verifications, Cascade VOE can also help you reduce costs and recoup more of your operating expenses from borrowers while adhering to TRID requirements.
Cascade VOE’s Latest Updates
Since its launch several years ago, countless lenders have seen excellent results with Cascade VOE. However, that hasn’t stopped our team from innovating.
Cascade VOE’s latest upgrades include the ability to:
- Order based on previous employment history – Already have an applicant’s previous employment details? Cascade VOE can use this information to initiate a new order with ease.
- Enter important employer information upfront – Rather than waiting for an error message to input key information, you can now provide key salary and employer data right from the start.
- Greater vendor flexibility – If you want to use a specific VOE provider for a certain applicant, you can choose them upfront and override your automated cascade.
What is Smart Select?
While Cascade VOE can automate your income and employment verifications, Smart Select is specifically designed for credit report ordering. This tool helps you use the least amount of credit reports possible to assess an applicant’s eligibility.
Here’s how it works:
- You customize your lending criteria, including your required credit score, zip code, and status regarding bankruptcies, foreclosures, delinquencies, and defaults.
- You select your preferred parameters from the following options:
- 1 bureau -> 3 bureau – With this option, Smart Select pulls a single-bureau credit file first. If this credit file satisfies your stated thresholds, it will automatically upgrade to a three-bureau report.
- 2 bureau -> 3 bureau – This option allows you to start with a two-bureau report instead. If either bureau meets your credit thresholds, Smart Select will go on and order the full tri-merge.
- 1 bureau -> 2 bureau -> 3 bureau – Finally, you have the option to upgrade credit files one bureau at a time to ensure maximum cost savings.
- 1 bureau -> 3 bureau – With this option, Smart Select pulls a single-bureau credit file first. If this credit file satisfies your stated thresholds, it will automatically upgrade to a three-bureau report.
- You let Smart Select automate your orders – After you configure your settings, Smart Select will follow your directions with every credit report order, saving you time and money. Meanwhile, you can use the extra time to focus on the borrowers who are most likely to close.
Leveraging Smart Select is an easy way to cut back on your credit reporting costs. It can take unqualified borrowers out of the running for the lowest price possible. Better yet, it can improve your borrower experience by freeing up more of your time to devote to applicants who are most likely to close.
Avoid These 3 Common Ordering Mistakes
Together, Cascade VOE and Smart Select can solve a lot of ordering inefficiencies on their own. To make the most of these tools, make sure you avoid these common mistakes:
- Over-relying on instant-hit verifications – While instant-hit providers are fast, they still have some shortcomings. These providers can be pricey and often leave out gig workers, business owners, and independent contractors. While many Cascade VOE users place an instant-hit provider at the top of their cascade, you can cover all of your bases by including some CPD providers lower down on the list.
- Ordering VOEs too early or too late – Another common mistake is ordering VOEs too early. Premature verifications can increase your costs by forcing you to pay for data for applicants who are unlikely to make it to the closing table.
On the flip side, ordering verifications too late is also an issue. It can create bottlenecks in your workflow, leaving your underwriters waiting on key documentation and potentially delaying your borrowers’ closing timelines.
To determine the ideal position for your VOE, reach out to Certified Credit. Our workflow optimization experts can evaluate your lending process and pinpoint the ideal positioning for cost savings. - Only using Smart Select for formal credit reports – Smart Select can save you a lot of money during your borrowers’ formal applications. However, it’s just as beneficial during prequalification, since soft pulls are priced nearly as high as hard pulls these days.
Read More: Cutting Costs & Building Business with Prequalification & SmartSelect
Perfect Your Ordering Process With Certified Credit
Optimizing your credit report and VOE orders can yield powerful results, from lower operating costs to more loyal borrowers. If you want to experience these benefits, give Cascade VOE and Smart Select a try.
Along with these two game-changing solutions, we offer a wide range of other products and services at Certified Credit. These tools include:
- Credit score improvement tools
- Automated credit supplements
- Automated lead generation
- Automated prequalification
- Undisclosed debt monitoring
- Flood zone determinations
- Fraud and risk support
- Property and valuation tools
- Settlement service
Want to see how our workflow optimization experts can help you elevate your ordering process? Schedule a credit consultation with our team today!
Sources:
Freddie Mac. 2024 Cost to Originate.
https://sf.freddiemac.com/ceros/cost-to-originate
McKinsey & Company. Five trends reshaping the US home mortgage industry.
