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A verification of deposit is a document through which a mortgage lender obtains proof from a borrowers banking institution of his or her balances. Upon a lenders request, a banking institution will fulfill this inquiry by providing current data as well as two months worth of the borrowers average bank balances.
A Verification of Deposit form is a document that is part of a personal mortgage loan application package and is used as a risk-mitigation measure. It is sent from one financial institution to another to confirm either that a customers: cash deposit amounts as reported on the loan application are correct.
Authenticity verification: The hold period allows the bank to verify the authenticity of the check (1). This is done to prevent fraudulent activity and protect customers and the bank from potential losses.
Proof of deposit (POD) is either a verification that a mortgage borrower has the funds for down payment or that the dollar amount of a check or draft deposit is correct.
Banks employ sophisticated fraud detection systems that meticulously scrutinize various data points to identify red flags. A manual review by trained bank employees may sometimes be conducted to spot signs of check fraud. This human intervention adds an additional layer of security, ensuring a thorough review.