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100% Commission... Industry is in the TANK! Can't make money! Can I quit and file?

by John W.

Short and sweet - I'm an HONEST mortgage broker in the mid-west where the housing market didn't go too kooky. While I fully understand the current economic conditions the country faces - and fully expected for my income to drop some because of it - I did not anticipate the fact that even when I had an outstanding borrower (credit, job, down payment, etc.) that the loans wouldn't get done due to some off the wall craziness that is now the mortgage industry. As I type it's mid-September 2009 and I've earned $5k YTD.... I am W-2 and I am paid 100% commission. They don't "let people go" because the brokers aren't costing them any money to have around.

2 questions:

1 - Am I pretty much screwed - generally - because I am in fact employed? Even if there's no money to be made?

2 - Is it a "good cause" if I quit because I was unable to close 2 loans (high loan amounts, would have earned about $6k total) because the company did not honor rate locks that I was specifically told (verbally and e-mail) would be honored?

I feel like I'm in a trap with my situation but really need the help that filing unemployment would bring while I find a new industry where I can actually make money.

Hi John,

I'm sure you are in the same boat with a whole lot of other mortgage brokers looking for a new profession to
transfer skills to. I wish you all the best.

The first thing I checked on was whether the money you do earn has "Coverage" since it is 100 percent commission. It doesn't look like it is excluded such as it would be for insurance or real estate agents in OK. But just to be safe .. ask your employer if they pay UI taxes on your commissions.

So I wandered over to the Oklahoma website and looked for some kind of Oklahoma unemployment benefit guide as to how they make determinations for voluntary quits for your reason. I do not get many visitors from Oklahoma:)

Lo and behold they have something!! .. A precedent manual.

Although I think it's not the greatest of manuals. It's better than none at all, which is usually the case.

If you read OK's definition of what is good cause for quitting, you might notice possibilities for an exit strategy, but you better hurry because .. the longer you stay given your current earnings .. the smaller your weekly benefit amount will become every quarter.

This information has been given with an assumption that you have always been paid straight commission only and that it was your employer's fault that you were unable to earn any money because they failed to honor a rate lock.

Oh, and that they do pay unemployment tax on wages.

If this was a recent change in pay structure .. my answer would probably have taken another direction.

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