Mortgage Daily Logo

Chase Hit with LO OT Lawsuit

Mortgage News

A lawsuit has been filed by a Florida loan originator against JPMorgan Chase & Co.’s mortgage unit alleging unpaid overtime. The plaintiff’s lawyers hope to add other similarly situated originators as plaintiffs.

The U.S. Department of Labor issued Administrator’s Interpretation No. 2010-1 on March 24. The interpretation completely reversed a 2006 opinion from the department that loan officers were exempt from the Fair Labor Standards Act’s overtime requirements based on an administrative exemption.

The latest interpretation was expected to unleash a torrent of litigation by overzealous attorneys.

Today, Morgan and Morgan announced that it filed a collective action on May 28 in U.S. District Court for the District of New Jersey against Chase Home Finance LLC.

The Florida-based law firm claims that a class of bank branch originators worked from 9 a.m. to 6 p.m. on Mondays through Fridays, from 9 a.m. to 3 p.m. on Saturdays and another 30 minutes each day for a “morning huddle.” But they were not properly compensated for the overtime that they worked — violating the Fair Labor Standards Act.

“Instead of receiving overtime pay for these additional hours worked, the bank branch loan officers were paid either their non-refundable draw of $2,000 per month or their commissions earned, whichever was greater,” according to the announcement.

The lead plaintiff in the case, Judson Newhall, was hired by Chase in March 2009, according to the complaint. The Manatee County, Fla., resident didn’t received required overtime compensation through Jan. 1, 2010.

Citing Department of Labor Deputy Administrator Nancy J. Leppink’s recently issued letter, the law firm added, “Employers are required to compensate non-exempt workers at a rate of one-and-one-half times their regular rate for all hours worked in excess of forty hours in a week.”

Chase, which through a spokesman declined to comment, is also accused of failing to maintain proper time records for its employees as required by the act.

Doug Mishkin, a partner with Patton Boggs LLP who counsels lenders in employment cases, said employers can expect to see more FLSA lawsuits tied to originator overtime.

“As to liability for past practices, employers may be able to show that the relied in good faith on the DOL’s 2006 opinion letter saying that mortgage loan officers were exempt,” Mishkin said in a statement.

Mishkin identified three factors that lenders should use in determining whether or not to pay overtime now to originators, including whether the administrator’s interpretation is entitled to deference by the court; whether loan officers are primarily doing sales; and whether they qualify for other exemptions, such as the outside sales or highly compensated employee exemptions.

In March, a complaint was filed against Chase in U.S. District Court for the Southern District of New York claiming that the lender failed to pay its underwriters overtime. The company allegedly had a common practice of mis-classifying its loan underwriters as exempt.

Judson Newhall, on his own behalf and all similarly situated individuals, Plaintiff, v. Chase Home Finance LLC, a foreign limited liability company, Defendant.

Case 2:10-cv-02749-WJM -MF, May 28, 2010 (U.S. District Court for the District of New Jersey).

Related:
LO Compensation Gets Complicated
A number of issues have arisen as a result of a new government opinion on mortgage originator overtime — including the overtime rate for super-producing originators. A Webinar on the subject provided insight into employer liability and offered some advice about dealing with potential overtime litigation.

Chase Sued Over Underwriter Overtime
JPMorgan Chase & Co. is accused in a federal lawsuit of not paying its underwriters overtime.

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Mortgage Servicer Portfolios

servicing news | mortgages outstanding statistics | foreclosure news   Servicing Portfolios as of 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 Residential Servicing Portfolios by Servicer Last Updated December 14, 2018...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Fannie Mae Profile

Last Updated December 27, 2018 7:38 PM Central   full list | other directories | bank search | SEC filings | execs | m&a | production   Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move --...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Freddie Mac Profile

Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move -- which is likely to push mortgage rates lower and provide a sense of stability for the more than 10,000 employees at both companies -- is a...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI