Two Lies and a Truth About VOIE

We often hear customers using the wrong metrics to evaluate their income verification process and vendors. So in this post, I’m going to share two deceptive metrics that will steer you wrong and one truthful metric that will steer you right.

Two VOIE Lies (Deceptive Metrics): Coverage Rate and Hit Rate

1. Coverage rate. This is the squishiest metric you can measure your VOIE process with. Coverage refers to what percentage of potential loan recipients a vendor has data on. Not accurate data. Not up-to-date data. Just data. Any old data will do. This means that a vendor can claim to have 95% or heck, 155% coverage rate, but a huge percentage of that “coverage” will serve up bad hits or will have outdated information. This is why we consider this metric to be deceptive. It’s the least helpful in understanding how well you can do in your VOIE process,
2. Hit rate. This is a less squishy metric, but let’s just say that it’s still quite slippery. Why? Because a “hit” can serve up duplicate record and still count as a hit. Or it could serve up only a partial record, which isn’t fully useful. So, when a vendor says they’ve got a high hit rate, those hits can still deliver a fair amount of garbage.

Monetizing Lying Metrics

If these deceptive metrics and claims didn’t cost you anything, there would be no concern. The problem is that vendors monetize these metrics. In so many cases, you have to pay for coverage and hits that don’t bring you anywhere closer to your goal.

There’s no sport that awards points for attempts on goal. Sales people don’t get paid commissions for “the old college try but no close.” But vendors that sell you on coverage and hit rate want to be paid for trying, rather than completing a VOIE process. Kinda shady if you ask me.

But it gets worse. Not only does it cost you directly out of pocket when you pay for garbage hits, but it also means you have to pile on the costs of other verification methods, often driven by human heroics. Meanwhile, those vendors are counting their money. Thank you and you’re welcome.

One Truthful Metric: Completion Rate

Completion rate is about how often you get back a report that will move your underwriting process forward. It is the only metric that matters in VOIE.

Why do completion rates matter? When your completion rate is high (75% completion rate and above), it means that you don’t have to pay for hits that you can’t use for your underwriting flow. When the completion rate is high, you never put your borrower or your loan officer through an experience that will not generate a report at the level the coverage might indicate.

You also minimize in-house costs to finish the job that you thought you were paying to get done for you (grrr).

So, by focusing your organization on high completion rates, you minimize data costs and maximize time savings for your team.

Completion rate is the standard that Truework sets for itself. We publish our results openly, which you can find last month's here. And we offer this metric outcome on a platform basis.