U.S. Supreme Court to hear mortgage loan officers' pay case

WASHINGTON Mon Jun 16, 2014 10:06am EDT

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WASHINGTON (Reuters) - The U.S. Supreme Court on Monday agreed to weigh a dispute over whether mortgage loan officers are exempt from minimum wage and overtime pay regulations.

The two related cases concern a decision in 2010 by the U.S. Labor Department, which reversed a 2004 finding made during the administration of President George W. Bush that had concluded mortgage loan officers were exempt from the regulations.

The Mortgage Bankers Association challenged the more recent finding in court, leading to the current litigation over whether the government followed the correct process in changing course.

The association believes the government was required to conduct a formal rule making process, which would have allowed interested parties to submit comments. The government said it did not because it was merely offering a new interpretation of an existing regulation.

A district court judge ruled in favor of the government but, in a July 2013 ruling, the U.S. Court of Appeals for the District of Columbia Circuit threw out the new interpretation, saying a formal rule making process was required.

Oral arguments and a decision are expected in the court's next term, which begins in October and ends in June 2015.

The two related cases are Perez v. Mortgage Bankers Association and Nickols v. Mortgage Bankers Association, U.S. Supreme Court, No. 13-1041 and No. 13-1052.

(Reporting by Lawrence Hurley; Editing by Howard Goller and Grant McCool)

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Comments (1)
djaymick1 wrote:
My wife is a mortgage loan consultant and has been so for over 20 years. Here is how it works. A mortgage loan consultant is pure commissioned job. 100% of their pay comes from closing new mortgages. However, when she went into the business or went from one mortgage company to the other, she was always offered the same thing – a small salary in order to develop her “book of business”. This agreement last a few months, depending on the person’s employment history. My wife has a book of business that followers her regardless of company. During that time, she was able to close deals and make more than the small salary, so the company gets reimbursed and my wife makes out with a higher paycheck.
The new rules will only hurt the best mortgage consultants in the business. Many companies have already cut their commission structure to these individuals. What this will do is throw a lot of them into a “salaried position” hurting their ability to make a lot of money. It will also force these companies to keep on “dead weight” (people who are not closing loans) and will face lawsuits when they are forced out.

Jun 16, 2014 10:41am EDT  --  Report as abuse
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