Liberty Reverse Mortgage, a top 10 reverse mortgage lender owned by Ocwen Financial Corp. and its subsidiary PHH Mortgage Corp., allegedly violated California labor laws by failing to provide employees with rest breaks, meal breaks and appropriate compensation for off-the-clock and overtime work, according to a newly filed class-action lawsuit.
The suit, filed by former Liberty employee Michaela LaNere in Sacramento County Superior Court, seeks to recoup lost wages and other associated damages as detailed in a court complaint, which was reviewed by RMD.
If approval for a class is granted, attorneys seek to “temporarily, preliminarily and permanently [enjoin and restrain Liberty] from engaging in similar unlawful conduct,” and to require the company to “pay all overtime wages and all sums unlawfully withheld from compensation.”
Attorneys for the proposed class also seek restitution for the company’s “ill-gotten gains” resulting from its alleged violations, as well as compensatory damages that include pay for overtime worked.
This includes compensation for meal and rest periods that were allegedly unfulfilled, as well as expenses incurred by the class for their job duties and any legal fees that may arise from the case.
The plaintiff and proposed class are represented by attorneys at Zakay Law Group APLC and JCL Law Firm APC, according to a press release announcing the lawsuit. Representatives for the law firms could not be immediately reached for comment.
A representative of PHH Mortgage told RMD that the lender is currently weighing its next steps in response to the complaint.
“We are aware of the complaint and reviewing the matter,” the PHH spokesperson said. “Regarding the allegations made in the complaint, we take pride in how we treat our employees, and we do so fairly and within the requirements of the law.”
Liberty/PHH parent company Ocwen posted a $64 million loss in 2023 but forecasts a generally positive trajectory for its reverse mortgage origination and servicing businesses, according to a recent earnings report.
As more forward mortgage participants seem to be entering the reverse space of late, Ocwen CEO Glen Messina said during the earnings call that the company is supporting several forward correspondent clients in joining the reverse mortgage business.
“Because we participate in all segments of the reverse industry from an originations perspective — so direct-to-consumer, wholesale and correspondent — we would expect to benefit the most in our correspondent channel by seeing a growth in forward originators moving into the reverse product space,” he said.
