How Automated Employment Assessment Works
Fannie Mae's automated employment assessment lets lenders verify your job and income through digital data instead of calling your HR department or requesting employment letters. The system, called Asset and Income Modeler (AIM), connects to databases that contain your payroll and banking information.
Your lender submits your employment data to Loan Product Advisor, Fannie Mae's automated underwriting system. The system analyzes the information and tells your lender whether they qualify for protection from certain warranty claims related to your employment verification.
Say you work as a marketing manager at a tech company. Instead of your lender calling your employer or requesting a verification of employment letter, they can use your bank account data showing regular payroll deposits or connect to a database with your employment information. The system verifies you work where you say you work and earn what you claim to earn.
Two Types of Data the System Uses
The automated assessment works with two types of employment data: account data from your bank statements and employed income data from verification services.
Account data comes from your bank statements showing payroll deposits. Your lender needs to see at least three consecutive payroll deposits from the same employer. The deposits must clearly show they come from your current employer's payroll system.
Employed income data comes from third-party verification services that access employer databases directly. These services pull your employment and income information electronically from your employer's payroll system. The key requirement is that the data must come from an automated process, not from someone calling or emailing your employer.
Who Qualifies for Automated Assessment
Most W-2 employees qualify for automated employment assessment. The system works for salaried employees, hourly workers, and those with commission or bonus income.
However, several employment situations are excluded. You cannot use automated assessment if a family member employs you, if you work for the property seller or real estate agent involved in your transaction, or if you receive income on Form 1099 for services performed. The system also excludes borrowers with business ownership interests of less than 25%.
Foreign employment income does not qualify for automated assessment. If you work for a company based outside the United States, your lender must use traditional employment verification methods.
Required Documents and Information
For account-based verification, your lender needs access to your bank statements showing payroll deposits. The statements must clearly identify the deposits as coming from your employer's payroll system. Generic transfers or deposits without clear employer identification will not work.
For employed income data verification, your lender needs your recent paystubs and W-2 forms that comply with standard age requirements found in [[Section 5102.4]]. The paystubs must be current and show your year-to-date earnings.
Your lender must also confirm that the account information belongs to you and that the payor listed matches your current employer. They verify this using information already in your loan file, such as your employment history and income documentation.
Why Fannie Mae Created This System
Traditional employment verification can slow down loan processing and create delays at closing. Employers sometimes take days or weeks to respond to verification requests, and HR departments may provide incomplete information.
Automated assessment speeds up the process while maintaining accuracy. The system accesses real-time payroll data and bank deposit information, which often provides more current and complete employment details than traditional verification methods.
The system also reduces the burden on employers who receive numerous verification requests. Instead of processing individual requests, employers can participate in databases that provide automated access to employment information.
Representation and Warranty Relief
When the automated system approves your employment verification, your lender receives protection from certain warranty claims. This means Fannie Mae will not hold the lender responsible for employment-related issues if the automated system verified your job and income correctly.
The protection covers your current employment through the close-by date shown on the Loan Product Advisor feedback certificate. Your loan must close by this date for the protection to remain valid. The protection also covers the accuracy of data from verification reports, though not from paystubs you provide directly.
If the system returns "Not Eligible" or "Unavailable" results, your lender must use traditional employment verification methods described in other sections of the Fannie Mae guidelines.
Common Issues and Complications
Temporary leave of absence can complicate automated assessment. If you have taken leave from work, the verification must show you have returned to your job. When using employed income data from paystubs and W-2 forms, your lender must document in your file that you have returned to work.
Inconsistent information between your loan application, verification reports, and other documentation will trigger additional review. Your lender must investigate and resolve any contradictions before the automated assessment can proceed. This might require resubmitting corrected information to Loan Product Advisor.
Timing issues can also create problems. If your lender obtains updated verification reports or paystubs after the initial submission, they must resubmit the new information to Loan Product Advisor. If your loan does not close by the close-by date on the feedback certificate, your lender must either resubmit for a new date or complete traditional employment verification.
The three-year employment continuity requirement can trip up borrowers in certain situations. Your lender cannot use automated assessment if they have any knowledge that suggests your employment might not continue for at least three years after closing. This includes information about planned layoffs, company restructuring, or your stated intention to change jobs or retire.
References
For the official guidelines, see 5302.6: Automated employment assessment with Loan Product Advisor® in the Fannie Mae Selling Guide.
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Original Freddie Mac Guideline Text
This section contains:
Overview
Eligible employment earnings using account data
Eligible employment earnings using employed income data
Underwriting requirements
Data submission requirements, representation and warranty relief eligibility and documentation requirements
(a)
Overview
Representation and warranty relief eligibility is contingent on the Seller’s compliance with the requirements of this chapter.
Asset and income modeler (AIM) automated employment assessment provides Sellers with the option to use Loan Product Advisor
®
to determine whether the Seller is eligible for relief from enforcement of certain representations and warranties related to the Borrower’s current employment.
The Seller must obtain the Borrower’s account or employed income data and submit all required data and information to Loan Product Advisor. Based on the data submitted, Loan Product Advisor will assess for representation and warranty relief eligibility and return the results of the assessment on the Feedback Certificate.
(b)
Eligible employment earnings using account data
Section 5303.1
, are eligible for automated employment assessment with Loan Product Advisor, except for Borrowers with business ownership interest(s) less than 25%.
When using account data, the Borrower’s depository history must reflect a minimum of three consecutive payroll deposits from the same payor(s).
(c)
Eligible employment earnings using employed income data
Section 5303.1
, are eligible for automated employment assessment with Loan Product Advisor, except for earnings with the following employment/income characteristics:
Earnings of a Borrower employed by a family member, the property seller, real estate broker or other interested party to the transaction
Employed income from foreign sources
Income reported on IRS Form 1099 for services performed
Borrowers with business ownership interest(s) less than 25%
(d)
(i)
General underwriting requirements
The Seller must have no knowledge, information or documentation that contradicts an expectation that the current employment will continue for at least the next three years.
In the event the Borrower has taken a temporary leave of absence from his or her employment:
When a verification report is obtained, the verification report must indicate that, as of the date of the verification report, the Borrower has returned to work
When the employed income data has been obtained from the Borrower’s paystub(s) and W-2 form(s), the Seller must maintain documentation in the Mortgage file showing the Borrower has returned to work
(ii)
For the age of the documentation:
When a verification report is obtained, the expiration date of the verification report reflected on the Last Feedback Certificate complies with the requirements in
Section 5102.4
When the employed income data has been obtained from the Borrower’s paystub(s) and W-2 form(s), the paystub and W-2 must comply with the requirements in
(e)
Data submission requirements, representation and warranty relief eligibility and documentation requirements
(i)
Data submission requirements
For Mortgages with an automated employment assessment using Loan Product Advisor, the Seller must:
Submit the most current account data or employed income data to Loan Product Advisor
Investigate and resolve any inconsistent or contradictory information between the verification report, information contained in
Form 65, Uniform Residential Loan Application
(including the Borrower’s income and employment representations), and the Mortgage file and, if applicable, resubmit the correct information to Loan Product Advisor
Resubmit the data to Loan Product Advisor if an updated verification report or paystub(s) is obtained after the initial submission
(A)
Automated employment assessment with Loan Product Advisor using account data
For Mortgages that are eligible for automated employment assessment with Loan Product Advisor using account data, the Seller must confirm:
Each account on the verification report is owned by at least one Borrower
The payor(s) is the Borrower’s current employer by using the information in the Mortgage file
(B)
Automated employment assessment with Loan Product Advisor using employed income data
For Mortgages that are eligible for automated employment assessment with Loan Product Advisor using employed income data, the following requirements must be met:
The Seller must confirm that the information on the verification report or paystub(s) and W-2 form(s) is for the correct Borrower and employer
When a verification report is obtained, the method used to produce the verification report must be an automated process where the employed income data is accessed directly from an electronic database of employer-provided income information. The employed income data on the verification report cannot be obtained from a written, verbal or email verification of income performed by the service provider.
(C)
Automated employment assessment with Freddie Mac’s application programming interface (API)
For Mortgages not submitted or resubmitted to Loan Product Advisor, the Freddie Mac API can be used to meet the 10-day pre-closing employment verification requirements as described in
Section 5302.3
. Such Mortgages are not eligible for relief of representations and warranties related to the Borrower’s employment.
To obtain the API report, the Seller must:
Submit the Borrower's account data or employed income data to the API
Close by the close-by date reflected in messaging on either the “AIM Employment API Assessment” or the “AIM Account Data API Assessment”
Maintain the “AIM Employment API Assessment” or the “AIM Account Data API Assessment”, as applicable, in the Mortgage file
(ii)
Representation and warranty relief results on Feedback Certificate
If multiple Loan Product Advisor submissions are made, the Seller’s eligibility for representation and warranty relief will be based on the results on the Last Feedback Certificate.
When employment representation and warranty eligibility results are provided on the Last Feedback Certificate, the representation and warranty relief available is described in the following table:
Employment representation and warranty relief based on Feedback Certificate results
Eligible
The Seller is relieved from enforcement of the following representations and warranties:
Borrower’s current employment through the close-by-date on the Feedback Certificate. The Note Date of the Mortgage must be on or before the close-by-date reflected in the Last Feedback Certificate for the 10-day pre-closing verification requirement to be met.
Accuracy and integrity of the data represented on the verification report
Note: The Seller is not relieved from the representations and warranties related to the accuracy and integrity of the data when obtained from the Borrower’s paystub(s).
Not eligible
The Seller is not eligible for relief from enforcement of representation and warranties related to the Borrower’s employment.
Unavailable
The Seller is not eligible for relief from enforcement of representation and warranties related to the Borrower’s employment.
(iii)
Documentation requirements based on representation and warranty relief result on Feedback Certificate
When employment representation and warranty relief eligibility results are provided on the Last Feedback Certificate, the documentation requirements are described in the following table:
Documentation requirements based on representation and warranty relief result on Feedback Certificate
Eligible
The verification report and paystub(s), as applicable, must be maintained in the Mortgage file.
Paystub documentation must meet the requirements of
Section 5302.2
.
If the Note Date of the Mortgage is not on or before the close-by date on the Last Feedback Certificate, the Seller must resubmit to Loan Product Advisor to obtain a new close-by date or meet the requirements described above in
5302.6(e)(i)(C)
.
Not eligible
The employment must be verified and documented as required by the Guide.
Unavailable
The employment must be verified and documented as required by the Guide.
