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Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.

Employment is Litigious Affair

Recent activity on mortgage employment lawsuits

May 1, 2011 (updated May 4)


portrait of Sam Garcia

Lawyers for recently defeated employees in an overtime case have vowed to fight on and pursue further litigation against the same lender. Other active employment cases involve whistle blowers, alleged stolen customer records and claims of labor code violations.

A new trial will be sought by former employees against Quicken Loans Inc., Nichols Kaster PLLP said following a jury verdict in favor of Quicken on March 17. The original case was filed in U.S. District Court for the Eastern District of Michigan.

"We are obviously disappointed in the result," Nichols Kaster attorney Paul Lukas said in a statement. "We intend to seek a new trial in this case and aggressively pursue the other three cases currently pending against Quicken on behalf of loan officers in this same court."

Nicholas Kaster said a U.S. Department of Labor interpretation last year that concluded inside loan officers like Quicken's have sales as their primary job duty and are therefore entitled to overtime pay. The law firm claims that a number of cases it filed were cited by the Labor Department -- allegedly prompting Quicken in May 2010 to start paying the inside originators overtime.

The Quicken lawsuit had garnered the support of the Mortgage Bankers Association, the American Bankers Association and several other trade organizations -- which all filed an amicus brief requesting that Judge Murphy reject adoption of the Administrator's Interpretation No. 2010-1.

After this story was published, Quicken requested that the following statement from the company be added:

A Quicken Loans spokesperson asserted that the company has always followed the law and made no changes to its policies as a result of anything that Nichols Kaster has ever done -- or filed.

A class-action lawsuit was initiated against Cascade Mortgage Inc. by mortgage consultant Robert Clausen on Jan. 12 in U.S. District Court for the District of Minnesota, according to an announcement from Nichols Kaster. Unpaid overtime and minimum wages are sought from the Minneapolis-based lender.

Cascade is accused of misclassifying consultants as exempt from the overtime and minimum wage requirements of the Fair Labor Standards Act and Minnesota state law.

California's Second District Court of Appeals on April 7 affirmed a lower court's decision to award Rebecca Waters only $100,000 in her lawsuit against Fidelity Capital Mortgage Brokers. She called the amount "unconscionable" and requested that it be raised to $888,751.

Waters joined Fidelity in January 2007 and was terminated in October 2007. She claims that Fidelity owner George Zioni and Mayer Dallal, a company officer, falsified incorporation documents, committed loan fraud and hired undocumented workers -- among other things. She alleges that after refusing to cooperate in the illicit activities -- she was demoted to a lower-paying job and micromanaged.

Waters had alleged violations of the Fair Employment and Housing Act, wrongful termination, violation of the Labor Code and Civil Code, intentional infliction of emotional distress and breach of contract.

On appeal, a judgment in favor of the defendants -- seven former employees of Charter Oak Lending Group LLC and their new employer CTX Mortgage Company LLC -- was reversed as to counts alleging violation of Connecticut Uniform Trade Secrets Act, breach of fiduciary duty, violation
of the act and civil conspiracy. The lawsuit, filed by Charter Oak, was remanded for a new trial on those counts, though the judgment was affirmed in all other respects.

Charter Oak cut the compensation of the defendants in late 2004, around the time two defendants attended a recruiting seminar hosted by CTX. Four of the defendants immediately resigned, while the rest left in January 2005. All of the former employees joined CTX. Charter Oak claims that the former employees diverted its confidential information and loans to CTX.

U.S. District Judge Rosemary Collyer denied a request for a dismissal in a whistleblower lawsuit filed by former Fannie Mae executive Caroline Herron, iWatch reported. After Herron returned in 2009 to Fannie as a consultant, she reportedly wrote a scathing report about the handling of government modifications -- which Fannie claims was written because she couldn't convert her contract status to a permanent returning employee.

On its Web site, the National Association of Independent Housing Professionals said that it has withdrawn its lawsuit against the Federal Reserve Board. The lawsuit was originally filed during March in U.S. District Court for the District of Columbia in an attempt to prevent the implementation of the Fed's Regulation Z rule.

The case was eventually consolidated with a lawsuit filed by the National Association of Mortgage Brokers, and a judgment was rendered in favor of the Fed. The trade groups won a temporary reprieve when an appeals court briefly delayed the rule's implementation -- but a stay was eventually lifted.

Seyfarth Shaw's 2011 Workplace Class Action Litigation Report indicated that t
he value of employment discrimination class action settlements increased four-fold in 2010 from 2009. The top ten settlements of wage & hour, ERISA and governmental enforcement class actions increased to $1.16 billion -- the highest amount ever.

A wage-and-hour litigation blog has been launched by the employment law firm of Seyfarth Shaw. The Web property, which promises to be a resource for employers, discusses cases relating to the FLSA such as the Quicken case.

National Association of Independent Housing Professionals Inc., 601 Pennsylvania Avenue, N.W., Suite 900, Washington, D.C., 20004, Plaintiff, v. Board of Governors of the Federal Reserve System, 20th Street and Constitution Ave., N.W., Washington, D.C., 20551, Defendant.
March 7, 2011 (U.S. District Court for the District of Columbia).

REBECCA WATERS, Plaintiff and Appellant, v. FIDELITY CAPITAL MORTGAGE BROKERS et al., Defendants and Respondents.
No. B224016 (Court of Appeals of California, Second District, Division One).

Robert Clausen et al v. Cascade Mortgage Inc. et al.
Court File No. 0:11-cv-00089-PJS -LIB (U.S. District Court for the District of Minnesota).

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of in 2000.

[email protected]

Mortgage Employment News | Employment Index | Employment Statistics
Job additions, layoffs and employment lawsuits. Employment data from the Department of Labor, state tracking, reports and analysis. Job finding tips.

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