How do mortgage lenders check and verify bank statements?

In some cases, your lender might call your bank to verify your bank account and statements. Most lenders, however, fill out verification of deposit (VOD) request forms and send them to your bank to verify your account. Many banks provide downloadable VOD forms for lenders on their websites.

A lender that submits a VOD form to a bank gets confirmation of the loan applicant’s account number, whether the account is open or closed, the date when the account was opened or closed and the type of bank account being verified, such as savings, checking or money market. The bank also confirms the account balance as of the date of the request. The lender might request confirmation of the average balance over a two- to three-month period and the balance at the time of closure, if the account is closed. Banks send VOD confirmations to lenders via fax or mail.

Lenders have the discretion to request your bank statements or seek VOD from your bank; some lenders do both. Lenders that use both VODs and bank statements to determine mortgage eligibility do so to satisfy the requirements of some government-insured loans where the source of down payment funds must be known for mortgage approval.

Some consumers may wonder if asking their lenders to verify their deposits rather than review bank statements will help them hide blemishes such as overdrafts. Lenders reviewing bank statements typically dismiss rare overdrafts, but a consumer with numerous overdrafts within the two- to three-month period before closing on a home will most likely be viewed as risky.