WaMu Faces Suit on Alleged Overtime Pay Violations

Washington Mutual Inc. here, the nation's third largest servicer and originator of home loans, is the latest mortgage lender to be sued over alleged violations of the Fair Labor Standards Act.

The case was filed by three former employees of the company in the U.S. District Court for the Eastern District in Brooklyn. The attorneys involved are Nichols Kaster & Anderson PLLP of Minneapolis and Outten & Golden LLP of New York. Nichols Kaster & Anderson has a website (www.overtimecases.com) that lists 10 other active cases against nine mortgage lenders.

Alan Gulick, a spokesman for WaMu, said the company has not yet seen the lawsuit so it was unable to comment on the specifics. "However, we believe our compensation practices are fair and ethical and we will vigorously defend our company against the allegations made."

The three plaintiffs in the case are Dewone Westerfield, of Grand Rapids, Mich., who worked in the Chicago office; Charlotte Machado of Trussville, Ala., who worked in the Modesto, Calif., office; and Patricia Kemesies, of East Islip, N.Y., who had been a home loan consultant in the Hauppauge, N.Y., office.

Their attorneys claim the three worked in excess of 40 hours a week with no overtime. If the loans they handled were not approved, the plaintiffs claim they received no pay for the long hours they worked, and this practice violates the minimum-wage provisions of FLSA.

Jack A. Raisner, an attorney with Outten & Golden, said, "The law does not allow employers to avoid paying overtime compensation to people who handle mortgages and loans on a strictly commission basis. Paying them less than minimum wage when their commissions dip is particularly harsh given the long hours these people work."

The attorneys are seeking to turn this case into a class-action lawsuit, with the class consisting of current or former WaMu home loan consultants, also known as loan officers and loan originators.

Paul J. Lukas, an attorney with Nichols Kaster & Anderson, said, "We allege that the unlawful conduct has been widespread, repeated and consistent. We believe that Washington Mutual has willfully committed widespread violations of the FLSA, and that the company knew that these employees and others performed work that required overtime pay and minimum wages."

Among the active cases against mortgage lenders listed on the www.overtimecases.com website are suits filed against Ace Mortgage Funding Inc., Centex Home Equity Co., Chase Manhattan, Fidelity Mortgage Inc., First NLC Financial Services LLC, Hamilton Mortgage Co., Heartland Home Finance, Home Funds Direct, New Century Financial and Quicken Home Loans (also known as Rock Financial).

The inactive case list includes Aames, Aegis, Ameriquest, Bank of America, Conseco, Homeowners and TCF. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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