wage verification

mushroomHR

We have an employee who is currently out of work on disability. He is also in the process of buying a house. The lender has been sending requests for income verification about this employee. Should we tell the lender that this employee is currently receiving disability at 70% of his pay, or just not tell them about the disability and give them the information of his normal hourly rate? I don't want to be dishonest with the lender and think we should tell them the truth but I also don't want the employee to lose their home purchase. What to do? Thanks.

HRCalico

There should be a phone number on there somewhere for questions on the verification form - I'd call and ask which way to fill it out. Although as I typed that, I wondered about HIPAA - I might start with my disability carrier first and see what they say. I can see how you are between a rock and a hard place.

Introspectively, I also might weigh what I know of the nature of the disability (if anything). If it is a broken leg and they are out for six weeks, I might proceed with their normal rate of pay. If it was a horrific car accident and they face months of therapy, I might look harder at identifying the disability amount.

Actually, though, if your disability works the same way as ours, they currently are not being paid by you, but by the insurance company. That in of itself might make me lean toward disclosing the 70%. I'm not as up on HIPAA as I should be, but if you keep it on the level of discussing status with the lender and not the details of the disability, I don't know if that would get you into trouble or not.

Guess I don't have a good straight answer for you, but hopefully some things to at least think about.

mushroomHR

We are self-insured on the disability so the money is actually coming from us. I don't think HIPAA comes into play because I am not divulging anything other than the fact that they are not actively at work but are out on short-term disability. And according to the employee, he may not be coming back to work. Yes, I am between a rock and a hard place.

HRCalico

Do you want the number for MY disability agent? :>) Seriously, I'd call the lender and ask them how to fill out the form.

Hunter1

I think you're heading in the right direction. Call the lender and ask them how to fill out the form.
In a previous life, I was in the process of buying a home, and my employer answered "Unknown" to the question concerning probability of continued employment. That answer resulted in the loan being denied and, boy, was I angry! That is, until a month later when all 170 employees at the facility received lay-off notices (including me), and I would not have been able to make my house payments. You may do the employee a favor by being honest.

LivindonSouth

I agree, Mushroom, and think you answered your own question. Call the number on the form and ask for their guidance. It is not a HIPAA violation to accurately and honestly fill out a loan form, as long as you are not revealing PMI, and I am sure you are not in this scenario.



"Life is a tragedy when seen in close-up, but a comedy in long-shot."
Charlie Chaplin