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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.

Underwriters Suing Employers

Recent employment litigation activity

Aug. 6, 2010

By staff

Several lawsuits alleging unpaid overtime have been filed against mortgage lenders by underwriters and loan originators. A single law firm is responsible for much of the litigation.

A lawsuit was filed on Aug. 3 in U.S. District Court for the Eastern District of Michigan against Flagstar Bank, according to a copy of the complaint provided by plaintiffs' counsel Nichols Kaster PLLP. The case was filed on behalf of all mortgage underwriters who worked for Flagstar during the past three years.

The Troy, Mich.-based lender is accused of misclassifying Mary Kitrys and other mortgage underwriters as exempt from the overtime requirements of the Fair Labor Standards Act and, in the process, improperly denying the plaintiffs overtime compensation.

On July 9, Residential Capital LLC and parent Ally Financial Inc. were named as defendants in a case filed in U.S. District Court for the Western District of Washington, according to a copy of the complaint also from Nichols Kaster. The two underwriters named as lead plaintiffs allege that the defendants improperly classified them as exempt and denied overtime compensation.

Nichols Kaster reports that it filed an overtime case against Quicken Loans Inc during May 2004 in U.S. District Court for the Eastern District of Michigan. Another lawsuit was filed against Quicken in March 2007 (Case No. 2:07-cv-10981) and a third action was filed in May 2010, according to the law firm.

The Quicken case has been ordered to mediation, though Nichols Kaster sees mediation as unlikely to resolve anything, The Detroit News reported. Around 1,400 former loan officers are involved in the Quicken litigation.

Detroit-based Nichols Kaster PLLP says it also has lawsuits pending against SunTrust Mortgage and Washington Mutual.

The lawsuits follow Administrator's Interpretation No. 2010-1 on March 24 from the Labor Department clarifying overtime compensation requirements.

A collective action lawsuit filed by Heather Rao, John Hill and Richard Thobe against Net Equity Financial Inc. has been reportedly settled. The case, which alleged violations of the Fair Labor Standards Act, was originally filed in U.S. District Court for the District of Maryland in October 2009.

MARY KITRYS, individually and on behalf of others similarly situated, Plaintiff, v. Flagstar Bank, Defendant.
Case 2:10-cv-13078-GER -RSW, Aug. 3, 2010 (U.S. District Court for the Eastern District of Michigan).

Bollinger et al. v. Residential Capital, LLC and Ally Financial Inc.
Case No. 2:10-cv-01123, July 9, 2010 (U.S. District Court for the Western District of Washington).

Heather Rao, John Hill and Richard Thobe v. Net Equity Financial, Inc., William James Peterson, III and Robert Lee Windsor.
Case No. 1:2009cv02752, Oct. 21, 2009 (U.S. District Court of Maryland for District of Maryland).

Ryan C. Henry, Individually and on behalf of other similarly situated employees, Plaintiff, -v- Quicken Loans Inc., a/k/a Rock Financial a Michigan Corporation, and Daniel B. Gilbert, William Emerson and Pat McInnis, Personally and Individually, Defendants.
May 17, 2004 (U.S. District Court for the Eastern District of Michigan).

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