MReport April 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 43 S E C O N DA R Y M A R K E T ORIGINATION O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T LOCAL EDITION Wells Fargo Responds to California Class Action Suit THE LAWSUIT COULD HAVE A BROADER IMPACT ON THE BANK'S WAGE AND COMMISSION PRACTICES FOR ITS MORTGAGE BUSINESS. CALIFORNIA // Wells Fargo is addressing the claims of a class- action suit alleging that the bank has violated California's wage and vacation laws. "Wells Fargo's com- pensation structure for its Home Mortgage Consultants (HMCs) complies with California's wage and hour laws, including paying for all time worked, and allows our HMCs to earn competitive performance-based compensa- tion," the bank said in a statement shared with MReport. At the crux of the matter is a lawsuit filed against Wells Fargo by James C. Kang, a loan officer who worked at Wells Fargo from October 2000 through May 2015, with a short break in employ- ment in 2011. Kang alleged that while the bank paid advances on commissions at a rate of ap- proximately $12 per hour, those advances were "clawed back" from commissions earned. He also alleged that Wells Fargo did not compensate HMCs for non-sales work and clawed back vacation pay from commissions with the result that HMCs did not actually receive their accrued vacation and that they did not pay HMCs overtime wages as required by law. According to Bloomberg Law, the suit was admitted in California courts as a class action suit since "these allega- tions were based on a common compensation plan applicable to all class members, making class certification appropriate," Judge Beth Labson Freeman wrote for the U.S. District Court for the Northern District of California. According to the suit, 4,500 employees have been affected by these alleged practices and are liable for compensation. As part of his allegations and appeal to make this a class-action suit, Kang had submitted the Findings of Fact and Conclusions of Law issued in another class action involving Wells Fargo's HMCs, Ibarra v. Wells Fargo Bank, N.A., which was litigated in the Central District of California. Home Point Launches New Program for Brokers THE PROGRAM WILL PROVIDE PROVIDE FINANCING SOLUTIONS TO UNDERSERVED YET CREDIT-WORTHY CUSTOMERS. MICHIGAN // Home Point Financial Corporation (Home Point) has announced the launch of non-agency mortgage lending solutions with its new Home Point Edge suite of products. Will Pendleton, Senior Managing Director/Non-Agency Segment Manager, will be leading this initiative for Home Point. "A significant segment of the workforce has been largely under- served by the traditional agency and prime jumbo mortgage products for years," Pendleton said. "The Home Point Edge lending platform is designed to provide financing solutions to those previously underserved, yet credit-worthy consumers." Pendleton continued, adding, "The Edge platform will pro- vide our business partners with financing solutions that enable them to grow their business and serve more of their qualified cus- tomers while maintaining disci- pline around their ability to repay and sustainable lending practices. Our proprietary lending platform will feature innovative products paired with a best-in-class sup- port team, competitive rates, and optimized technology. Our goal is to provide our partners with the tools they need to grow their business while being stewards of the industry." Home Point Edge will initially offer a Near-Prime product tier, with its Expanded Access and AUS Express products coming soon. Over time, Home Point will look to expand its offerings to best meet its partners' needs. "We strive to understand the needs of our clients and their customers. With Home Point Edge, we can help our partners navigate the complexity of non- agency lending and deliver not just loans, but confidence and execution," said Phil Shoemaker, Chief Business Officer at Home Point Financial. Home Point is a national mortgage originator and servicer. Located in Ann Arbor, Michigan, Home Point Financial is a sub- sidiary of Home Point Capital LP, a financial services holding com- pany founded in 2014 and owned by members of management and by investment funds managed by Stone Point Capital LLC. The outlook article stated that the rising mortgage rates that will only be a mild deterrent to purchase activity in 2019.

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