Former mortgage staff allege lenders stiffed them on paychecks

As mortgage lenders continue to shed staff, former employees are accusing them of bad behavior during last year's difficult market. Dozens of loan officers and other staff have sued home lenders in federal court for allegedly failing to pay them overtime, and in some cases, minimum wages. Over two dozen suits in the past 12 months have accused firms including industry leaders of violating state and federal wage statutes, according to a review of court records by National Mortgage News. The complaints include repercussions from a prolonged stretch of mass layoffs, which mortgage professionals also claim were handled poorly. While it's unclear if the new wave of lawsuits are coming at an outsized pace, a correlation with the market's decline is possible, according to one veteran industry attorney.

READ MORE: Former mortgage staff allege lenders stiffed them on paychecks

Tax refunds drive delinquencies to new low

The percentage of borrowers late on their mortgage experienced one of the most pronounced drops in nearly two decades in March, according to Black Knight's latest First Look report. The 53 basis-point decline drove delinquencies, excluding foreclosures, below 3% for the first time in March to 2.92% from 3.45% the previous month. Black Knight attributed the improvement to seasonal factors and what are generally high levels of home equity in mortgaged properties. "This is primarily due to tax returns and bonuses helping troubled homeowners right-size themselves, with March historically seeing the most downward pressure on delinquency rates as a result," said Andy Walden, vice president of enterprise research, in an email.

Real estate investors selling more homes at a loss

Real estate investors are taking losses on sales at the highest rate since 2016, according to new data from Redfin. Approximately 13.5% of homes offloaded by investors in March sold for less than what they originally paid, researchers at the online real estate brokerage said. While the number represents a decrease from 14.5% reported in February, recent levels are the highest since 2016 and nearly three times above the share a year earlier. In May 2022, investors lost money on a record-low 2.8% of sales by comparison. Likewise, average profits for investment properties sold contracted in March on an annual basis to $145,714, but still equal to a 45.9% gain. The margin was also down from 55.3%, or $173,458, 12 months earlier. 

Redlining probes created millions for originations, Fed says

The Department of Justice has reached almost $85 million in redlining settlements with financial institutions since 2021, according to a top prosecutor last week in an event at Seton Hall Law School in Newark, New Jersey. The DOJ since 2021 has reached six redlining agreements, its busiest two-year stretch ever, and last year received the most referrals for redlining perpetrators it ever had, said Kristen Clarke, assistant attorney for Civil Rights at the DOJ. "In the upcoming months we will continue to hold all types of mortgage lenders, not just traditional banks, but also mortgage companies and credit unions, accountable when they engage in discriminatory redlining practices," she said. 

The Top Producers of 2023: Most units originated

Another metric to determine who is a Top Producer is to look at their loan count. Some observers have noted that a dollar volume measuring stick rewards those that have high average loan balances. A loan officer from areas where home prices are below the national average can actually be more productive than their counterparts in metros with higher values. While the No. 1 originator by dollar volume, Shant Banosian of Guaranteed Rate, was also tops by units, the activity of others on this listing bears out the above. For example, Jaclyn Litton of Litton Mortgage, located in Shreveport, Louisiana, ranked 42nd on the dollar listing but 14th in terms of loans originated. Read on for the top 50 mortgage loan originators by units produced in 2023:

Sign up here to receive the National Mortgage News complete newsletter — delivered to your inbox daily.