In a legal showdown that could reshape the landscape for mortgage loan officers, a collective action against PHH Mortgage Corp. has gained momentum as a New Jersey U.S. District Judge, Karen M. Williams, issued a pivotal Thursday order.

Class Certification Granted, But Battle Continues

Judge Williams declared the certification of a class in a collective action filed against PHH Mortgage, accusing the company of labor law violations related to overtime pay miscalculations. The certified class encompasses individuals who served as mortgage loan officers for PHH Mortgage between Jan. 18, 2020, and Jan. 1, 2023.

However, the judge emphasized that the certification does not constitute an admission of liability on PHH's part. The corporation retains the right to pursue decertification or contest the inclusion of specific class members.

Phh Mortgage Loan Officers Win Collective Certificate : Origins of the Dispute

The legal saga commenced when Edward F. Martin, a former mortgage loan officer, initiated the proposed class and collective action against PHH Mortgage in December 2022. Martin alleged that the company violated the Fair Labor Standards Act by inadequately compensating overtime pay on commissions.

During his tenure at PHH from December 2019 to July 2022, Martin consistently worked over 40 hours per week. Although he received overtime compensation at one and a half times his base hourly rate for extra hours, he contends he was denied overtime pay for commissions tied to achieving specific loan submission and funded loan numbers.

The complaint extends the scope, asserting that approximately 40 current and former employees also experienced incorrect payment practices.

Phh Mortgage Loan Officers Win Collective Certificate :The Path Forward

Judge Williams outlined a plan for the next steps in the legal battle. A notice will be disseminated to potential class members, providing them with a 60-day window to submit written consent to join the collective action.

This case is part of a broader trend, echoing similar accusations against other financial institutions. Notable instances involve legal actions against Fairway Independent Mortgage Corp. and Homespire Mortgage Corp. where former employees allege improper payment practices.

Response and Representation

Despite attempts to reach out, neither party's counsel immediately responded to requests for comments.

Edward F. Martin is represented by Justin L. Swidler of Swartz Swidler LLC, while PHH Mortgage Corp. is represented by Christopher J. Moran of Troutman Pepper.