Broader FHA Range = More Opportunity

www.southeastmortgage.com
770-279-0222

Qualifying FHA Credit Score Lowered to 620 at Southeast Mortgage

With the evolution of Southeast Mortgage's secondary activities and broker dealer operations, we are pleased to offer clients a Federal Housing Administration, FHA, product down to a 620 FICO credit score.  Client's can enjoy our fast 8-day service with a product that puts opportunity in their hands.
 

Our Referral Partners and Licensed Mortgage Loan Originators will be able to serve a broader client base and grow sales.
 
Our goal is to bring Wall Street Mortgage Products to Main Street with fast service and competent advice.  Trust is the fiduciary duty our clients and referral partners count on and our guiding principal.
 
Client's with a 660 credit score or lower are better served choosing an FHA Loan versus a Conventional Loan.
 

FHA loans have been helping people become homeowners since 1934. FHA is part of HUD.  HUD insures the loan, so your lender can offer you a better deal.  Low down payments, Low closing costs, and easy credit qualifying

Cal Haupt
President and CEO
Southeast Mortgage
www.southeastmortgage.com
770-279-0222

Mortgage Originator Employers still required to track hours worked and pay overtime

Background:

Historically Mortgage Loan Officers, Mortgage Processors, Closers, and Sales Assistants positions were classified as exempt under Part 541.200 Administrative exemption. These positions were reclassified as non-exempt by the U.S. Department of Labor, DOL. 

Under the current regulations as interpreted by the DOL, all Mortgage Loan Officer job classifications are non-exempt and are required to track hours worked and report hours on a weekly basis. 

Recent Developments:

Mortgage Bankers Association v. Harris - http://scholar.google.com/scholar_case?case=4110371758046837108&hl=en&as_sdt=2&as_vis=1&oi=scholarr :  A federal Court of Appeals vacated an Administrator’s Interpretation issued in 2010 by the DOL Wage and Hour Division, DOL, regarding the non-exempt status of mortgage loan officers.  Not tracking Mortgage Loan Originator, MLO, hours creates a significant liability for employers in the mortgage industry during this debate. 

With a two year look back on hours worked and Plaintiff attorney fees paid by Employer, the liability can be staggering.  All Employers of MLOs are required and the burden of proof is on them to track MLO hours worked including overtime.  There are many lawyers that dedicate their practice to this area of law and seek out MLOs who are not required to track hours worked.  In addition to attorney fees paid by the employer, MLO's can be awarded back wages based on stated hours.  Employers rarely prevail in this type of case. 

This court decision reinstates a prior Opinion Letter issued by the DOL in 2006 that had concluded loan officers in the mortgage banking industry generally may qualify as exempt from overtime under the administrative exemption of the federal Fair Labor Standards Act.  MBA had challenged the contrary 2010 Interpretation because it had been issued by the DOL without first conducting the “notice and comment” rule making process required under the Administrative Procedure Act.

The Appeals Court agreed with the MBA, but took no position on the merits of whether mortgage loan officers may in fact qualify under the administrative exemption to be exempt from the payment of overtime wages. Thus, the DOL may subsequently readopt the 2010 Interpretation after conducting the proper rule making procedures. 

 

In the interim, mortgage industry employers may choose to rely on the 2006 Opinion Letter to potentially escape overtime liability regarding their loan officers at their own peril. 

Southeast Mortgage’s General Counsel opinion on the recent court decision:

After review of the 2006 DOL Administrator's Interpretation and the 2010 Administrator's Interpretation, and the summary of the Court of Appeals ruling, SEM believes there is a very high likelihood that the DOL will reissue the Administrator's Interpretation and follow the proper rule making procedures and then formally adopt the 2010 Interpretation as the prevailing rule on the treatment of MLO's as non-exempt.

The rationale of the 2010 Interpretation is consistent with the views of a Democratic Party appointee, and the rule making process can be completed relatively quickly. SEM does not see a high probability that a different interpretation will be adopted, and there would be an unacceptable risk to revisit treating MLO's as exempt employees. 

 

The rationale used in the 2010 Interpretation has valid reasoning and cites relevant court cases that support the interpretation and the Court of Appeals does not criticize the rationale of the 2010 Interpretation, just the procedure followed in implementing a new rule that overturns a prior, contrary interpretation.

DOL Determination: Mortgage Loan Officer Job Classification

Historically Mortgage Loan Officers, Mortgage Processors, Closers, Specialists and Sales Assistants positions were classified as exempt under Part 541.200 Administrative exemption. These positions were reclassified as non-exempt. 

Mortgage Loan Officer, MLO, sales positions have historically been classified as exempt under the Outside Sales Exemption US Wage & Hour Part 541.500, 541.501 and 541.502.

The outside sales exemption requires that the majority of the employee’s time be spent developing business and meeting face to face with clients and referral partners outside and away from the employer’s place of business. A place of business is an office or an MLOs home office. Due to the convenience of technology today, the majority of the business conducted by MLOs is done via internet, email, phone, and fax. In the past, this activity has been more incidental to an outside sale (face to face appointment with a client) and thus did not present a problem relative to meeting the outside sales exemption under Part 541.  In the present, sales activity conducted via internet, email, phone, and fax is no longer incidental to, but is the primary way business is conducted. As a result, all MLO positions are non-exempt.  To satisfy the exempt test, MLOs have to meet with clients at their client’s home at least 80% of their work time.  MLOs will still be able to work both in and out of offices on an at will basis, but will be required to record hours worked on a weekly basis.

Although the U.S. Department of Labor (DOL) has not issued an official opinion letter specifically regarding the MLO position and the “outside sales exemption,” it did previously issue an opinion in 2006 which concluded that typical loan officers were exempt from Fair Labor Standards Act (FLSA) requirements for overtime payments under the “administrative exemption”. More recently in March of 2010, the DOL reversed the 2006 opinion and stated that the typical loan officer position no longer met the “administrative exemption.”

As of January 12, 2011, The Mortgage Bankers Association (MBA) filed suit against the U.S. Department of Labor (DOL) in the United States District Court for the District of Columbia under the Administrative Procedure Act (APA). The suit seeks to set aside DOL’s Wage and Hour Division Administrator’s Interpretation No. 2010-1 (March 24, 2010) that reversed and withdrew a 2006 opinion letter from DOL to MBA.

Employees who fall under non-exempt classifications are entitled to a guaranteed minimum wage of $7.25 per hour for every hour worked between 1 and 40 in a work week and are entitled to overtime pay at a rate not less than one and one-half times their regular rates of pay after 40 hours of work in a workweek.  Regular rates of pay are calculated based upon weekly earnings including commissions.  All compensation must be paid on a W2 basis.

Under the current regulations as interpreted by the DOL, all Mortgage Loan Officer job classifications are non-exempt and are required to use time tracking systems to report hours worked on a weekly basis.

 

Cal Haupt, President and CEO, Southeast Mortgage

www.southeastmortgage.com
770-279-0222

Southeast Mortgage is proud to sponsor EAB youth baseball

East Atlanta Baseball currently fields 8U, 9U, 11U, and 12U. All age groups receive the same great training with the curriculum tailored to their specific age group & skill level. While the core purpose of EAB is baseball development and training, each EAB team plays a very competitive tournament schedule. Each team is made up of a group of dedicated players and families with the same goal in mind; Learning the game at a higher level and having fun!
http://www.eastatlantabaseball.com/east-atlanta-baseball-teams

www.southeastmortgage.com
770-279-0222

Perimeter Social Max Luau was a Huge Hit Last Night with 200+ guests.....

A genuine Hawaiian Luau in Atlanta with Good Friends, Music, Refreshments and fun for all!  Join us at our next event.

Consumers: Mortgage Rates are Bias Up .... If you have a need, time to Act.

Previous mortgage cycles dictate once the yield curve steepens, rates gradually and at times pop higher.

We have seen the lows created by monetary policy and we thank the Fed for those low rate years.

For consumers: buying a home is a non-monetary decision given it meets a personal need for the family, your esteem, or financial security.  With limited supply, a strong equities market, and a promising employment trend; we expect housing values to continue a strong appreciation trend.

It is high tide, all boats have risen. 
Read: http://southeastmortgage.blogspot.com/2011/12/low-country-view-of-recessions-from.html

Interest Rate Bias Up Pattern is in Tact from 3/22/2013 Blog - Update

Back in March a pattern began to form foreshadowing the capitulation and inevitable rise in mortgage rates.  Anyone that asks what I think the market will do gets a similar answer "Mortgage Cycles are predictable if you know how to read the tea leaves; however, the timing is not quantifiable."

What is important to Consumers is the housing market is fantastic, values will continue to move up, employment is strong, and everyone is happy with their investments.  This amplifies consumers spending which stimulates the economy.

Rates will continue to move up so act on housing needs today and lock your rate as soon as possible.  The generational low in rates was a gift fueled by QE1 - QE3.  Today a consumer will trade a little higher rate for great appreciation in housing values driven by the lack of supply to meet demand.  Personally, I would take great appreciation over low rates any day.  Rates do not matter consumer need and consumer benefit does.

3/22/2013 Blog Post:

The chart below shows mortgage bond prices over the last six months.  Interest rates and bond prices have an inverse relationship – the lower the bond price, the higher the interest rate.  The chart shows that bond prices are fluctuating within a band that is declining thus the trend higher for rates.

Rates are trending higher so finding that home or taking advantage of refinance savings is becoming more time sensitive.

 

 

www.southeastmortgage.com

770-279-0222