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California Wage Lawsuit Argues Mortgage Company's Pay Practices

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Draper and Kramer Mortgage Corporation has been hit with a California wage lawsuit, alleging the company did not pay loan officers commissions and other payments.

Berkeley, CAA former loans officer with Draper and Kramer Mortgage Corporation has filed a California wage lawsuit alleging the company stiffed him and other loan officers out of commissions and other payments, including overtime compensation.

Jose Vasquez filed the lawsuit in September 2020 in the U.S. District Court Northern District of California on behalf of current and former loan officers of Draper and Kramer Mortgage Corp. The former employee claims that "Draper and Kramer's unlawful compensation policy and practice is a notable departure from the 'industry standard' in which most all mortgage brokerages compensate their loan officers," according to the lawsuit. He argues the mortgage company’s compensation policy violates federal and state laws because it never paid him for non-sales work and found ways to avoid or delay commissions owed to him on loan sales.

The lawsuit further contends Draper and Kramer failed to authorize, permit and/or make available lawful paid rest breaks, to provide off duty meal periods, and to reimburse Loan Officers for all necessary business expenses incurred in performing their job duties. (A Loan Officer’s job sometimes involved meeting with clients in the field.) Further, “Defendant failed to maintain records of their actual hours worked and did not pay overtime.

Misclassified as Exempt

According to the lawsuit, Vasquez and other loans officers:

  • Did not receive any sort of compensation other than commissions promised in the Employment Agreement.
  • Did not have any loans fund during the preceding pay period would not receive wages during that particular pay period.
  • Plaintiff often had pay periods where he worked substantial hours, including overtime, without receiving any pay during that pay period.
  • Plaintiff and other Loan Officers frequently worked more than eight hours in a day or more than forty in a week and were, therefore, entitled to overtime premiums under California law and/or the FLSA.
  • Defendant failed to pay overtime premiums and instead improperly treated the Plaintiff and other Loan Officers as though they were exempt employees under California law and/or the FLSA

Draper and Kramer pays commissions to loan officers once the loan has been successfully sold off in the secondary market, according to the lawsuit. Until that time, anything paid to loan officers is considered an advance, which is sometimes subject to the loan officer's having to repay.   

Part of the company’s employment agreement says loan officers leaving the company will be paid for loans that close before their departure in a "reasonable timeframe" once the loan is sold off. But this policy violates California state law, which requires employers to pay workers within 72 hours of their last day on the job, and "not maybe pay separated employees for some of their labor already performed at some unspecified future dates,” argues Vasquez.

Draper and Kramer Mortgage Corp. is the residential mortgage division of Draper and Kramer, one of the country’s premier full-service property and financial services firms. The family-owned company headquartered in Chicago, has been around for 127 years, employing Loan Officers in 54 offices in 22 states. The company invited the public to its new branch in Santa Barbara and meet Jose Vaquez, along with other employees, when all was well in September 2018.

On it website the company states the following: “We have built Draper and Kramer Mortgage Corp. around the loan officer, so much so that we’ve been rated as one of the top 100 mortgage companies in America and one of the 50 best to work for.”


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