(855) 263-3525

Mortgage Underwriters Win $2 Million In Overtime Claim

SEATTLE — Mortgage underwriters for Homecomings Financial, a GMAC brand, will share some of the recent $2 million settlement agreement, if a Washington federal court judge approves the offer. GMAC Mortgage LLC and Residential Capital, both affiliated companies with Ally, agreed to the settlement. The settlement offer comes as part of Residential Capital’s bankruptcy plan and will end the underwriters’ overtime lawsuit against Residential Capital and its parent company, Ally.

The lawsuit alleges the company misclassified its mortgage underwriters as exempt and failed to pay proper overtime wages and proper meal and rest periods in violation of the Fair Labor Standards Act (FLSA). Eighty-two of 92 current and former mortgage underwriters opted-in to the lawsuit, which was filed in 2010 by two mortgage underwriters in Bellevue, Washington. The plaintiffs claim they were regularly required to work nights and weekends without proper compensation ie. overtime pay. The lawsuit received class certification in 2011, but was put on hold in 2012 when Residential Capital filed for Chapter 11 bankruptcy. Chapter 11 bankruptcy allows a company to continue operating while it reorganizes and renegotiates its debts.

After the company filed bankruptcy, the plaintiffs asked the court to allow the case to go forward, but they were denied. Residential Capital went forward with bankruptcy proceedings and created a bankruptcy plan that describes renegotiated debts and payment plans. Fortunately the bankruptcy plan, filed in 2013, included provisions for this settlement. Under the proposed settlement and bankruptcy plan, the plaintiffs and their counsel will receive about a third of the $2 million claim.

The reason the plaintiffs are not receiving the full amount or more of the $2 million claim is because of the company’s bankruptcy proceedings. These proceedings are where creditors and those who are owed money from the company negotiate and determine to how much of the company’s remaining assets or money they are entitled. It is usually better to get some of the money owed than none of the money owed.

In many cases, like this one, bankruptcy plans and settlement offers will include provisions the prevent creditors or plaintiffs from seeking more money for the same claim in the future. That is one reason why this proposed settlement releases all claims against Ally. Parent companies, like Ally, and companies that purchase other companies may, in some cases, be held liable for old and outstanding debts and lawsuits.

If you are a mortgage underwriter and believe your employer owes you overtime pay, even if that employer is in bankruptcy proceedings, contact our experienced team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. Or complete the Free Unpaid Overtime Case Review form on the top right of this page and our knowledgeable legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.

Text Now For Free Case Review