Maryland Legal Alert for Financial Services

MARYLAND LEGAL ALERT keeps you updated on Maryland legal developments affecting financial services providers. If you would like more information about the items in this issue, please click on the specified links or contact any member of the Financial Services Practice Group. Learn more about Gordon Feinblatt by clicking here.
In this issue:

. WAGES: ADMINISTRATIVE EXEMPTION MAY APPLY TO COMMISSIONED LOAN ORIGINATORS
. SELF-HELP REMEDY IS LAWFUL BUT BE CAREFUL WITH PERSONAL PROPERTY INSIDE
. PUBLICATION: NEW FORECLOSURE REGULATIONS

WAGES: ADMINISTRATIVE EXEMPTION MAY APPLY TO COMMISSIONED LOAN ORIGINATORSFacts can make all the difference. Many employers, particularly mortgage businesses, have struggled in recent years with the apparent unavailability of any exemption from minimum wage and overtime laws for commissioned mortgage loan originators. A recent decision by the United States Court of Appeals for the Sixth Circuit may allow the exemption conversation to be renewed. In Henry, et al. v. Quicken Loans, Inc., decided October 25, 2012, the Court of Appeals upheld the jury verdict in the lower court. The jury decided, based on disputed facts presented at a 5-week trial, that the employment duties and activities of certain mortgage loan originator employees made them eligible for the Fair Labor Standards Act administrative exemption from minimum wage and overtime requirements. In light of the disputed facts, the Court of Appeals held that it was a question of fact, not a question of law, whether the FLSA administrative exemption was available. Further, the Court of Appeals held that the jury's conclusions were not unreasonable based on the disputed facts presented. This case may lead employers to think again about whether the primary duties performed by their loan originators might meet the FLSA administrative exemption. Please contact Margie Corwin or Chuck Bacharach if you want to discuss how this Sixth Circuit case might influence court decisions in the Fourth (and other) Circuits and how employers might best document the particular duties and activities of commissioned loan originators.

SELF-HELP REMEDY IS LAWFUL BUT BE CAREFUL WITH PERSONAL PROPERTY INSIDEMaryland's Court of Appeals recently upheld the common law remedy of self-help in connection with a foreclosure of residential property. The Court in Nickens v. Mount Vernon Realty Group, LLC, et al., decided October 19, 2012, found lawful the manner of self-help used by the foreclosure sale purchaser to gain possession of the real property (in this case by entering the property when the occupant was not present and changing the locks). The use of self-help was upheld even in light of a local statute that establishes a specific procedure to gain possession of occupied foreclosed-upon residential property. The Court concluded that the local statute did not abrogate the common law. However, the Court instructed that the self-help remedy not only requires the exercise of reasonableness in relation to the real property being repossessed, but also requires reasonableness in dealing with the personal property of the occupant found inside the real property. The Court advised that there can be liability if disposition of personal property is not accomplished in a reasonable manner. This decision is instructive for all persons involved in foreclosures. Please contact Margie Corwin if you would like to discuss this decision in more detail.

PUBLICATION: NEW FORECLOSURE REGULATIONSAs reported in our October 2012 Maryland Legal Alert, regulations were issued by both the Maryland Department of Labor, Licensing and Regulation and the Maryland Department of Housing and Community Development to implement the new Maryland pre-foreclosure mediation process. Those regulations were published in the October 19, 2012 Maryland Register, both as emergency regulations effective October 1, 2012 and as proposed regulations with comments due by November 19, 2012. Please contact Margie Corwin or Bob Enten if you have any questions.