Loan officers in three states have sued an Indianapolis-based mortgage broker over allegations they were not paid minimum wage and overtime compensation.
Five loan officers filed a collective action last week against Ace Mortgage Funding Inc., its principals and related corporations, alleging they worked for weeks at a time without receiving any compensation and were not paid overtime compensation for hours worked over 40, according to an announcement by two law firms representing the workers, Burr & Smith LLP and Nichols, Kaster & Anderson PLLP.
One worker alleges he asked Ace President Richard Hall in May if he could be paid at least minimum wage for his hours worked, but instead was fired, the announcement said.
But Ace, which says it offers loans in more than 35 states and has branch offices in 10 states, "adamantly denies the charges brought and stands by its compensation structure and policies," Hall said in an e-mail statement to MortgageDaily.com. "Our staff of loan officers is among the best in the industry, and we've rewarded them by offering one of the highest pay structures in the industry."
However, "Ace has virtually no defense to this case because it failed to pay its loan officers any salary at all," the announcement said. "The law is well-established that paying only occasional commissions to inside sales employees violates the requirements" of the Fair Labor Standards Act.
The employees, who worked at branches in Minnesota, Missouri and Indiana, reportedly seek to have their case certified as a collective action under the act.
A Web site, OvertimeCases.com, encourages former Ace employees to participate in the legal.
The case is one of many against mortgage companies by the two law firms. Nichols, Kaster & Anderson has represented over 10,000 plaintiffs in various cases seeking overtime and minimum wage compensation, including suits against Bank of America, CTX Mortgage Co and Chase Manhattan Mortgage, while Burr & Smith recently sued Global Executive Mortgage Inc. for compensating employees with only commission, according to the announcement.
"[T]hese cases are merely the tip of the iceberg because the financial services industry continues to ignore the requirements of the FLSA," stated Sam Smith of Burr & Smith in the written statement.