former bankers of rocket mortgage have filed a class action lawsuit claiming the lender failed to fully compensate their overtime wages, a violation of the Fair Labor Standards Act. The lender denied the allegations in a statement to HousingWire, calling it a “desperate” move.
The allegations about the company’s labor practices became public in November amid a challenging mortgage market. Like its competitors, Michigan-based Rocket was hit hard by rising mortgage rates in 2022, causing refinancing volume to dry up.
Despite its efforts to obtain more purchase loans, Rocket lost $166 million in the third quarter of 2022 and fell from its position as the nation’s largest mortgage lender. He was replaced at the top spot by United Wholesale Mortgage (UWM).
To adjust its structure to the new landscape, the company imposed two voluntary purchase programs in April Y August. The remaining employees reportedly faced intense pressure to do business, resulting in working overtime.
But the latest lawsuit, filed January 4 in US District Court in Arizona, claims Rocket failed to pay for overtime, which should be billed at 1.5 times hourly pay for the hours worked overtime. 40 per week. The class action lawsuit targets current and former employees.
Aaron Emerson, a spokesman for Rocket, told HousingWire that the lawsuit “is nothing more than a desperate last-minute attempt by a group of former employees who knowingly and willfully violated the terms of their employment with our company and They are already part of pending lawsuits.” litigation.”
According to Emerson, Rocket “fully expects these unsubstantiated claims to be dismissed as we move forward to hold these individuals accountable for their actions.”
The plaintiffs, including Rachael Gilburd, Andrew Gebhart, Daniel Featherstone, Derek Martin, Angela McGuire, Kori Morin, Katherine Redas, Erin Salava, David Vallejo, and Nick Vincent, were the creators of the company.
“At all relevant times, Defendant incorrectly calculated Plaintiff’s regular rate of pay pursuant to the FLSA,” the lawsuit states. “Respondent failed to properly incorporate the incentives, bonuses, and additional compensation paid to Claimants each pay period as part of determining their regular rate of pay.”
According to the lawsuit, the former bankers are demanding a jury trial and compensatory damages.
Rocket originated $25.6 billion in mortgage volume in the third quarter of 2022, which was 71% below the $88 billion in volume it produced in the same period of 2021, when refinancing business was still plentiful.
The mortgage technology platform modex shows that the company has about 5,700 active loan officers and 1,720 branches.
in a Wall Street Journal In a deep dive into Rocket’s business in October, Amanda Womack, a former company employee, said: “When it’s good, they encourage you to come in to make even more sales. When it’s bad, they encourage you to come in because you’re not making money for the company.”
At the time, Rocket told the Journal that it had made changes, including an increase in hourly pay for new bankers and loan fees for seasoned bankers. The company said the average banker worked up to seven fewer hours per week in 2022 compared to 2021 and sales targets were lowered.
