Mortgage lender loanDepot recently became the target of a lawsuit filed by a group of former California employees who have complaints about the company’s work conditions.
The lawsuit was filed on December 23 in the Superior Court of the State of California for the County of Orange by about 40 former loanDepot employees, including loan officers, processors, underwriters, loss mitigation and foreclosure specialists.
The group is accusing the company of failing to pay minimum and overtime wages; provide meal and rest periods; reimburse work-related expenses; provide accurate wage statements; pay wages upon termination; or maintain records of hours worked and earned.
A representative for loanDepot said the company “declines to comment due to the pending litigation.”
loanDepot is the seventh-largest mortgage lender in the nation, according to Inside Mortgage Finance’s rankings. The company produced $47.4 billion in the first nine months of 2022, a decline of 56% compared to the same period in 2021, IMF shows.
One of the lender’s focuses was to cut costs in the 2022 shrinking mortgage market. The company laid off thousands of employees last year and temporarily suspended the 401K match program effective October 2022.
“To stay strong, we must take every step available to align our cost structure to current and projected mortgage origination volumes,” loanDepot’s CEO Frank Martell wrote in an October email sent to employees.
“With mortgage volumes down more than 60% this year, we have had to substantially reduce our costs (staffing, third party/vendor, real estate, etc.) accordingly. The company remains committed to treating those impacted in a fair and compassionate way,” he added.
The lawsuit, however, provides insight into the alleged work conditions for employees remaining at the mortgage lender. According to the document, providing loan services is “time sensitive, rigorous and nonstop.”
Consequently, the former employees were “frequently prevented from taking timely meal periods and rest breaks and were not relieved of all duties to take such breaks due to constant work demands and staffing shortages.”
The lawsuit states that the company disregarded labor laws by prohibiting the former employees from taking 30-minute meal periods for every five hours worked and 10-minute rest periods for every four hours worked.
The former employees claim they were not compensated for working while off the clock, nor were they reimbursed for work expenses, which were mainly related to using their phones while speaking to supervisors, clients, and coworkers about loans in process.
The plaintiffs are demanding a jury trial and compensatory damages.
Meanwhile, loanDepot allowed several of the company’s top executives to receive generous pay raises in the form of higher base salaries and bonuses in 2022 amid cost-cutting initiatives, which multiple employees told HousingWire was tough to stomach.
“The recent SEC filing regarding the pay raises, your article and the email regarding our 401(k) match being suspended was an absolute kick in the teeth,” one longtime loanDepot staffer said to HousingWire at that time. “Many unhappy folks around here.”
