LO, lender spar over out-of-office lunchtime in wage claim
National Mortgage News
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A mortgage lender is arguing a loan officer's lunch hours and use of personal technology are reasons to toss his class action wage claims. Ex-Draper and Kramer Mortgage Corp. LO Jose Vasquez and 24 of his colleagues are seeking millions of dollars in unpaid overtime wages and penalties from the lender in a suit filed in 2020. The Fair Labor Standards Act complaint, like many other industry lawsuits, hinges on whether the originators were considered exempt from receiving overtime pay according to labor laws. Vasquez was exempt from receiving overtime pay because of outside sales activity, including client lunches out of the office 1-2 hours a day and up to two times a week, attorneys for the lender argue.
The share of homebuyer mortgages with appraisal waivers sold to the government-sponsored enterprises rose to a high for the year as 2024 came to a close, and further acceleration is likely. The percentage of purchase loans with waivers rose to 14.5% from 12.1% in December, according to the most recent Recursion Co. analysis of Fannie Mae and Freddie Mac data. The variation in share other months was generally a percentage point or less. A planned extension of appraisal waiver eligibility for purchase mortgages with elevated loan-to-value ratios will likely result in an even higher share when it takes effect in the first quarter of this year.
The Federal Housing Finance Agency and Treasury on Thursday made changes to the pacts the U.S. government has with two major government-sponsored enterprises that add certain steps ahead of a release. The amendments aim to preserve Fannie Mae and Freddie Mac's ability to support housing initiatives. A key concern in any plan to remove Fannie and Freddie from conservatorship would be whether it destabilizes U.S. home mortgage markets, where they have played a sizable role since the Great Financial Crisis' troubled housing market forced them into conservatorship.
Keefe, Bruyette & Woods is more bullish on the mortgage market for 2025 than other industry prognosticators, although it also notes total volume will remain below industry norms. Any production activity recovery will be further delayed past this year because of the lack of loans that are in the money to refinance, it notes. The report, part of a larger financial sector outlook from the investment banker, points out that just 3% of existing mortgages are refi candidates at 6.85%, the approximate current rate when KBW did its analysis.
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