Their loan officers are employees or independent contractors

Their loan officers are employees or independent contractors

Many mortgage lenders / brokers treat their loan officers (who are the sellers) as independent contractors. Visit Here http://credit-cash-loan.blogspot.com

Many mortgage lenders / brokers treat their officers of credit (which are the sellers) as independent contractors.Those loan officers are paid a commission based on the successful financing of a loan. Mortgage lenders / brokers pay the loan officers, whether as each transaction is closed or on a periodic basis. The amount paid to loan officer contains no tax deduction for federal, state or local. Often, the loan officer receives no benefit, such as paid health insurance by the company or paid sick or vacation. At the end of each year, mortgage lenders or release agents of IRS Form 1099 for their loan officers.

As a mortgage lender or a business, can not be classified if their loan officers are independent contractors or employees. This task has been given to the Internal Revenue Service, the U.S. Department of Labor, the state unemployment insurance agency, the state department of work and your state's workers' compensation insurance. Although each agency has its own guidelines, usually becomes the determination of the degree of control that the mortgage lender / broker and exercises the degree of independence that loan officer enjoys. When the mortgage lender / broker has the right to dictate what will be done and how we will, then the loan officer is an employee. Government agencies look at facts concerning the control of the conduct of the loan officer, financial control of the loan officer and the relationship between the lender Mortgage / agent and loan officer. The IRS has a 20 factor test for determining whether an employer / employee relationship exists. Such factors include if the loan officer must comply with the instructions, training mortgage lender / broker, working exclusively for the mortgage lender / broker, if the loan officer may independently hire assistants, if the loan officer has set hours of work, if there is a continuous and if periodic reports should be given to a supervisor. The IRS seems to have a bias towards finding an employer-employee relationship. Even if the mortgage lender / broker have a written agreement with the loan officer to classify him / her as an independent contractor, which is not binding on any federal or state agency.

If you have been treating your loan officers as independent contractors, when in fact, pass the test of 20 different factors such as employees, what are the ramifications? If the IRS or the Labor Department realize you have misclassified employees, are required to pay withholding taxes, plus interest or may impose fines that can bankrupt a company, or even bring criminal charges against the owners. Once the IRS has entered, other federal and state agencies are behind them and assessing their fines and penalties as well. If there is anything left, the loan officer may file a claim for unemployment compensation, retirement benefits, profit sharing, vacation pay, disability or other benefits that he / she would have received as an employee. Many mortgage companies have gone out of business because many treated their loan officers as independent contractors and not complying with wage and hour laws

How it works Internal Revenue Service or the Department of Labor to find out about you? Generally, a loan officer dismissed apply for unemployment benefits or an officer dissatisfied loan make a phone call to the agency. And the agency will always follow up.

You should also be aware that the agency approved by your lender or broker licensed loan officers considered to be employees because you are responsible for their actions. Although some states do not require loan officers are W-2 employees, no matter how you classify the loan officer who is in regulatory hot water. Banking Departments are worried that their company oversees the people operating under the auspices of his license. This requires that you monitor the activities of officials of the loan regardless of whether you paid as employees or independent contractors. After all, you are responsible for any violations of the lender / broker law, standards and policies committed by any person, including a loan originator, which operate under their license. Therefore, it is in your best interest to monitor them.

This article is designed to be of general interest. The specific information discussed may not apply to you. Before acting on any matter contained in this document you should consult your legal counsel and accounting staff.

Robin M. Gronsky has been practicing law since 1982. She is admitted to practice in New York, New Jersey and Florida.

As a former general counsel of a national mortgage lender, Ms. Gronsky has experience in corporate, licensing national mortgage on base, and all facets of real estate transactions.

Ms. Gronsky graduated magna cum laude from the State University of New York Buffalo and received his JD from Boston University School of Law.

Ms. Gronsky practice is oriented to maintain personal contact with customers and develop a close professional relationship work over a long period of time. This helps ensure that customers' the work of his was carried out by the lawyer they have chosen. Visit Here http://credit-cash-loan.blogspot.com

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