Ex-bankers Rocket Mortgage They filed a lawsuit seeking a class action. The suit claims that the lender did not fully compensate overtime wages. This is a violation to the Fair Labor Standards Act. HousingWire received a statement from the lender denying these allegations and calling it “desperate”.
In the midst of a difficult mortgage market, complaints about Rocket’s work practices were publicly made. Rocket, a Michigan company, was also affected by rising mortgage rates in 2022. This caused a decrease in refinance volume.
Rocket, despite its attempts to get more mortgage loans, lost $166m in the third quarter 2022. This relegated it from the top spot of the nation’s largest mortgage lenders. United Wholesale Mortgage (UWM) took its place as the number one mortgage lender in America.
In order to adapt its structure to this new environment, the company implemented two voluntary buyout programmes in April and august. According to reports, the remaining workers were under intense pressure to get new business. This led them into working longer hours.
The latest lawsuit was filed in U.S. District Court, Arizona on January 4. It claims Rocket didn’t pay overtime. This overtime should be charged at 1.5x the hourly rate for work exceeding 40 hours per week. Current and former employees are the targets of this class action suit.
Rocket spokesperson Aaron Emerson told HousingWire the lawsuit was “nothing but a desperate last-minute effort by a group former employees who knowingly, willingly, violated the terms and conditions of their employment with us company and are currently party to the pending litigation.”
Emerson says Rocket “fully anticipates that these basesless claims will be dismissed as we move toward holding these individuals accountable for their actions.”
Rachael Gilburd and Andrew Gebhart were the plaintiffs.
The lawsuit claims that Defendant incorrectly calculated Plaintiff’s FLSA-compliant regular rate of compensation. “Defendant did not properly include the bonuses, incentives and other compensation that Plaintiffs received in every pay period when determining their regular rates of pay.”
The lawsuit claims that the ex-bankers want a jury trial as well as compensatory damages.
Rocket generated $25.6 billion of mortgage volume during the third quarter 2022. This was 71% less than its $88 billion volume for the same period 2021 when there was plenty of refinancing activity.
The mortgage tech platform Modex The company boasts approximately 5,700 loan officers on active duty and 1720 branches.
Amanda Womack, an ex-employe of Rocket, stated that when it’s great, they encourage people to visit to increase sales. They encourage you to go in when it’s not good, even if you aren’t making any money.
Rocket stated to the Journal that it was making changes, including an increase of hourly wages for bankers who are new and increased per-loan commissions in the case of seasoned bankers. Rocket stated that the average banker would work seven more hours per week by 2022 than 2021, and its sales targets have been lower.