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Prospect Mortgage recently won a jury trial by applying the outside sales exemption to a loan officer suing Prospect for minimum wage and overtime. Following are comments posted by readers, showing many, but not all, loan officers view themselves as independent contractors. Others think W-2 tax classifications by employers are at odds with that view. Image: Thinkstock.

Free Agents Free Agents

"When such a person as this is taking all of the expenses and advertising, whether it be referral based or otherwise, they are most definitely considered self-employed. This is more of a win for those of us who contend we are a small business owner." Image: Fotolia.

You Eat What You Sell You Eat What You Sell

"My question is what part of 100% commission this loan officer did not understand?" Image: Fotolia.

You Have to If You Work There You Have to If You Work There

"Very interesting. I just started working for Prospect Mortgage. I with agree with the other followers comments. Loan officers should be treated pay-wise as independent contractors." Image: Fotolia.

A License to Be Independent A License to Be Independent

"It is unfortunate for LOs to suffer such discriminatory rules. We get certified and licensed just like Realtors or insurance agents. Why do we have to be on W-2?" Image: Thinkstock.

Doesn't that W-2 Mean Anything? Doesn't that W-2 Mean Anything?

"LOs no longer paid on a 1099 basis but rather on a W-2 [are] considered an employee...and no longer an independent contractor. I believe it is this employee status that drives the originator to request a minimum hourly pay." Image; Thinkstock.

Tough Times Spurring Suits? Tough Times Spurring Suits?

"I have never met a loan officer (except...in a call center)...asking to be paid...hourly...or...tied into..,hours until the economy gets tough or their employment is terminated...These people should be embarrassed for bringing these types of suits." Image: Thinkstock.

Six Reactions to Prospect Mortgage's Win in Loan Officer Pay Case
Prospect Mortgage's victory in a court case brought by a loan officer who sued for minimum wage and overtime has been the talk of the industry. Following are comments posted by readers on NationalMortgageNews.com showing the wide range of interpretations of the case.Many loan officers view themselves as independent contractors. Others think W-2 tax classifications by employers are at odds with that view.
Comments (2)
I think the real bottom line; is that as LO's we feel slighted. Becasue of Dodd-Frank and other Federal & State regulations; our pay (Commissions) have been cut significantly. We go through all the same steps as Real Estate Agents in terms of Licensing. Where we differ; is that we and the Banks we work for have to take all the risk for less pay. A Real Estate Agent recieve between 2.5 - 3% commission on a transaction; with very little liability after the Sale is completed. We as LO's and Banks are tied to that transaction for as long as they have the loan. Our License number along with the Bank's License number goes on the note and Deed. All this risk for; .69% to maybe if you are lucky 1.25% commission. That just seems wrong to me.
Posted by Steven P | Wednesday, March 05 2014 at 9:33AM ET
I totally agree with Steven's point of view. We loan officers are now regulated to death, have our incomes cut dramatically and are considered guilty without a trial or hearing. The Dodd-Frank Act is a travesty foisting upon us originators the sins of government agencies, Congress and our employers. We were not the ones who instigated the subprime mess, it was Barney Frank and Chris Dodd, along with Fannie Mae that caused the meltdown by forcing mortgage companies to suspend sound lending practices in order to extend mortgages to people who could ill afford them and had no idea what they were doing. The subprime mortgages were a great product for a very small segment of customer; primarily small business owners and corporate executive. Both of whom understood what they were getting themselves into. Now, originators are paying for the sins of the aforementioned culprits while they made off like bandits into the night leaving us to hold the bag!
Posted by Peter Harvey H | Thursday, April 03 2014 at 3:37PM ET
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