Court Says Obama Administration Played Fair in Allowing Overtime to Mortgage Loan Officers

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On Wednesday, U.S. District Judge Reggie Walton, Washington D.C., disagreed with the contention of the Mortgage Bankers Association that the Obama administration was wrong in allowing overtime pay to mortgage loan officers. The instant case arose from the Obama administration using its discretion to reclassify mortgage loan officers as eligible for overtime pay. Mortgage lending companies had sought to invalidate the rule after facing lawsuits from loan officers for recovery of back overtime pay.

In 2010, the U.S. Labor Department had held that the typical job duties of mortgage loan officers made them eligible to receive overtime pay overturning the decision of the Bush administration that had in 2006 made loan officers ineligible for such wages. With their previous status restored, loan officers started suing the mortgage lending companies who were already in deep trouble over their own misdeeds.

The Mortgage Bankers Association argued that the change brought in by the Obama administration was “an abrupt reversal” of the policy they had come to rely on. But the court found that the mortgage lenders failed to prove that they had relied on the 2006 policy in any substantive manner to hurt their businesses on policy change. On the other hand it was proved that mortgage lenders had for years relied on the policy that mortgage loan officers merited overtime pay until 2006.

  

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Parties affected and disgruntled by the judgment include Bank of America, JPMorgan Chase & Co and Quicken Loans Inc. The Mortgage Bankers Association may move for appeal though it was not confirmed.

The case is Mortgage Bankers Association v. Hilda Solis, et al., U.S. District Court for the District of Columbia, No. 11-cv-73.