The collapse of the New York metro area's largest mortgage lender has left about 600 employees without jobs and probably without health insurance, if the shutdowns of Taylor Bean & Whitaker and American Home Mortgage are any guide.
New York, NY (PRWEB) December 8, 2009 -- The shutdown of Long Island-based Lend America is a rerun of the nightmarish ending of American Home Mortgage, which closed suddenly in August 2007, and the jolting demise of Taylor, Bean & Whitaker Mortgage Corp., the 12th largest home-mortgage lender, which shut down this past August. These implosions focus attention on the plight of workers who believe they are safe in their jobs one day, and are laid-off the next. The sudden loss of jobs plus the loss of company health insurance when an employer files bankruptcy, is the prospect haunting the employees of Lend America. This double-whammy causes many employees immense hardship and draws attention to their legal rights, according to the national employee rights law firm of Outten & Golden LLP.
"The resemblances are eerie," says Jack A. Raisner , a partner of Outten & Golden LLP. Ideal Mortgage, doing business as Lend America and Key Mortgage, laid off most of its 600 employees on December 1, within 24 hours of having its license revoked by the Federal Housing Authority and Ginnie Mae, according to a report on newsday.com. On that morning, employees were locked out of their offices at 520 Broad Hollow Road, the former offices of American Home Mortgage, which shut down without notice on August 3, 2007. On Aug. 6, American Home filed for bankruptcy, and two days later, the firm of Outten & Golden LLP filed a WARN Act lawsuit on behalf the employees. Rasheed v. American Home Mortgage Corp. , Case No. 07-51688, U.S. Bankruptcy Court for the District of Delaware.
Taylor Bean, like Lend America, was also shutdown when it lost its ability to provide government-insured loans. "Taylor Bean was a dramatic instance of employees hoping they'd make it through bad times but getting kicked out the door just the same." Taylor Bean cut off health insurance two days after firing its employees, and filed for bankruptcy three weeks later. "We immediately brought the WARN Act lawsuit on behalf of the employees there, as well" says Raisner, "because they were given no notice." The suit, Callahan v. Taylor, Bean & Whitaker Mortgage Corp., Adv. Pro. No. 09-00439-JAF, is being litigated in U.S. Bankruptcy Court for the Middle District of Florida.
Raisner points out that this scenario has been playing out across the nation during the Great Recession, leading to many angry workers and lawsuits. "Employees especially resent the sudden reversal of fortune. That's why notice is so important, in fact, it's the law under the WARN Act."
The WARN Act (Worker Adjustment and Retraining Notification Act) requires covered employers to provide employees with 60 days advance written notice that will be losing their jobs in a mass layoff or shutdown. According to Raisner, it does not appear from reports that such notice was given to the employees of Lend America, just as it was not in Taylor Bean or American Home Mortgage.
Attorney René S. Roupinian, who co-chairs Outten & Golden LLP's WARN Act group (www.warnlawyers.com), urges employees to investigate whether they might be covered by the WARN Act, which provides eligible employees who receive less than 60 days termination notice up to 60 days back pay and benefits which include medical expenses incurred due to lack of health insurance during the notice period.
"Many employees do not realize that when an employer goes out of business, health insurance plans are usually terminated along with the employees," Roupinian says. "Although Lend America has not filed for bankruptcy, if it does, loss of health insurance is nearly a certainty. Employees are often let go with no insurance to pay for necessary prescriptions and medical procedures for themselves and their families. It's a harsh reality and can often be more devastating than the sudden loss of income."
It remains to be seen how Lend America's shutdown will affect the terminated employees, but they should know that they may have rights and recourse to soften the blow of unemployment that has affected so many in the mortgage industry and economy to date.
###
Source : PRWeb
