LOs Sue Ohio Mortgage Banker Over OT

Burr & Smith LLP recently announced that loan officers it represents accuse Residential Finance Corp. and its two principals, Michael Isaacs and David Stein, of wrongly denying them minimum wage pay and overtime compensation. The originators seek to have their claims certified as a collective action under the federal Fair Labor Standards Act.

“The financial services industry continues to ignore the fact that loan officers who perform inside sales and are paid solely on a commission basis are entitled to minimum wage and overtime compensation for hours worked over forty,” said the law firm’s Sam Smith in the announcement. “These loan officers will also be able to recover liquidated damages and attorneys’ fees and costs.”

Stein, vice president for the Columbus, Ohio-based mortgage banker, denied wrongdoing on behalf of the company.

It has “always been our policy to pay our people appropriately,” Stein told MortgageDaily.com.

The individuals who brought the lawsuit forward, Dimitry Shamootin, Ken Fisher, Gregg Garofolo and Andrew Martin, worked in Residential’s Tampa, Fla., office. Residential has offices in Arizona, Florida, Ohio and South Carolina, according to the announcement.

Stein said a couple of the loan officers are defendants in a case for business theft under Florida statute.

“There’s more to it than just a wage-and-hour issue,” Stein said. “We feel this lawsuit is motivated in retaliation to the business theft case.”

Smith told MortgageDaily.com that Residential does not meet federal law administrative and outside sales exemptions because loan officers are paid on a commission-only basis and work inside the office.

In addition to the collective action, the loan officers originally sought to have claims of unpaid minimum wage certified as a class action under Florida’s new Minimum Wage Amendment to the Constitution, the law firm reported.

While Smith believed the class action would possibly be the first filed under Florida’s new minimum wage constitutional provision, he said the complaint was amended to dismiss the class action after learning there were only 26 employees in the Florida office.

However, Smith said the collective action is likely to include the Florida office employees.

Burr & Smith recently resolved a similar case for 23 loan officers employed by ABN AMRO Mortgage Group Inc. for $575,000, according to the announcement. The firm has similar cases pending against Ace Mortgage Funding Corp. and Global Executive Mortgage Inc.

Bank of America recently agreed to pay $9 million to settle a class-action lawsuit that sought back pay for alleged unpaid overtime and minimum wages for an average of about 344 individuals.

Other lenders that have been entwined in such legal disputes include, Chase Manhattan Mortgage, CTX Mortgage, TCF Financial Corp., Heartland Home Finance and Aames Home Loan.