Class action against PHH Mortgage for lack of OT pay gets certified

Former loan officers of PHH Mortgage were handed a preliminary win as their class action lawsuit, which accuses the lender of improperly calculating overtime pay, was certified by a federal judge in New Jersey. 

The suit, originally filed in December 2022, alleges PHH Mortgage's compensation system violates the Fair Labor Standards Act and other state regulations because it fails to compensate LOs on their commissions.

PHH Mortgage allegedly violated FLSA by "improperly calculating the regular rate of the plaintiffs, improperly calculating the overtime owed and failing to pay plaintiffs the overtime due," documents filed show. Similar legal actions were lodged recently by loan officers against Rocket Mortgage and Bank of America.

According to the class action, the mortgage lender, a wholly owned subsidiary of Ocwen Financial Corp., "maintained an unlawful wage payment system for at least three years [2019 to 2022] and have enforced such unlawful policies."

PHH Mortgage did not respond to a request for comment.

The class action, which is represented by Edward Martin, a former loan officer at PHH, is estimated to have at least 40 members, the suit said. The class is made up of loan officers from Pennsylvania and New Jersey, all of whom are designated as non-exempt employees under FLSA and are required to be paid overtime.

According to the class plaintiff, from 2020 to 2022 he accrued over 245 hours of overtime. Martin, as well as the class, received overtime payments of one and a half times his base hourly rate of $20.19, but did not receive any overtime payments on his commissions.

Nonpayment of overtime on commissions violated the FLSA and the New Jersey Wage and Hour Law, the plaintiff claims. For LOs in Pennsylvania, not getting paid overtime on commissions is a violation of the Pennsylvania Minimum Wage Act.

The class asks the court to prohibit PHH Mortgage from "continuing to maintain their illegal policy, practice or customs in violation of federal wage and hour laws."

Plaintiffs also want the mortgage lender to compensate them for any and all pay they would have received "had it not been for defendants' illegal actions, including but not limited to past lost earnings," the suit said.