Some employees are being asked to repay millions of dollars in sign-on bonuses paid out during the height of the mortgage “boom” in 2021. Here’s the whole story.
Record Boom for the Mortgage Industry
In 2021, the mortgage industry experienced a “record boom.” Interest rates were low, and people took advantage by refinancing their mortgage or buying a new home.
Additional Workers Were Hired
Mortgage lenders originated $4.51 trillion in mortgage loans in 2021, and many lenders had to hire additional staff to keep up with the “boom” in business.
Sign-On Bonuses Offered
One mortgage company, Guaranteed Rate, offered sign-on bonuses to new employees who started working for them when mortgage rates were low and business was booming.
Former Employees Asked to Repay the Sign-On Bonus
Since business has slowed down, Guaranteed Rate has asked some employees to repay their sign-on bonus.
$100,000 Sign-On Bonus
David Siegel was hired by an affiliate of Guaranteed Rate in 2021. He received a sign-on bonus of over $100,000 when he started.
Fired One Month Shy of Two Years
Siegel said he was fired one month before the date the company could no longer ask for the sign-on bonus to be repaid. He said they “demanded” the money back as soon as he was fired.
Claw Back the Payments
Siegel said, “It seems like they realize they aren’t making money in their mortgage business, so the way to get income is to claw back the payments.”
Everyone Required to Repay
Guaranteed Rate told “hundreds of other former employees” that they would also need to repay their sign-on bonuses.
Not Apologetic
The general counsel for Guaranteed Rate released a statement that said, “We are not going to be apologetic about exercising our legal rights to recover our money.”
The company said they would “continue to enforce [their] agreements.”
Loans to Be Forgiven After Two Years
The sign-on bonuses were structured as loans that would be forgiven after two years as long as the employee remained hired and met specific performance goals.
Sizeable Sign-On Bonuses
Many employees left big mortgage companies to secure a sizeable sign-on bonus from Guaranteed Rate.
Employees Were Given the Money Upfront
According to one report, many bankers were given “hundreds of thousands of dollars upfront” when they went to work for Guaranteed Rate.
Some People Received Over $1 Million Bonuses
The highest sign-on bonus paid out by Guaranteed Rate was over $1 million, and a few of the “highest performing” bankers received this amount.
The Employees Who Didn’t Stay the Full Two Years
Some employees left Guaranteed Rate on their own before the two-year contract ended. However, others were fired and immediately asked to repay the sign-on bonus.
Other Companies Are in Trouble, Too
Guaranteed Rate isn’t the only mortgage lender trying to recoup funds from sign-on bonuses.
Nations Lending and Cross-Country Mortgage are other mortgage companies requiring former employees to repay their “six-figure” sign-on bonuses.
Get a Highly Skilled Attorney
Some critics think these employees should hire a “highly skilled attorney” to fight for them in court.
“Cutthroat” Industry
Another person called the sign-on bonus repayment “theft by corporate America.” Someone else called the mortgage industry “cutthroat” and said it was “managed by thieves.”
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The post “Theft by Corporate America” – Mortgage Industry Mayhem – Employees Forced To Repay Millions in ‘Boom-Era’ Sign-on Bonuses first appeared on Wealthy Living.
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