Skip to main content

Utah mortgage broker faces fraud charges in alleged fraud scheme

NationalMortgageProfessional.com
May 21, 2010

A federal grand jury returned a 15-count indictment charging Joshua Lee Butcher of Salt Lake City, with bank fraud and false statements to a financial institution in what the indictment alleges was a scheme to get construction loans approved using false pretenses. This indictment follows an investigation by the Federal Bureau of Investigation (FBI) and the Utah Mortgage Fraud Task Force. According to the indictment, Salt Lake Credit Union and Transwest Credit Union approved and funded construction loans relying on what they believed to be true and accurate borrower financial information which met their respective loan underwriting standards. The indictment alleges Butcher worked with both credit unions to broker loans for new home construction ranging from approximately $384,000 to $637,000. Butcher met with potential borrowers to obtain necessary financial information for the completion of a loan application. In these meetings, borrowers provided Butcher with accurate information about their income and assets. At times, borrowers also provided supporting documentation. Based on this information, the indictment alleges Butcher knew borrowers would not qualify for construction loans in the range they were seeking. The indictment alleges that Butcher prepared and submitted false loan applications on behalf of the borrowers to the credit unions to induce approval and funding of construction loans under false pretenses and to cause the payment of broker fees to him which he was not entitled to receive. The indictment alleges that in order to qualify borrowers for the construction loans, Butcher falsified loan applications by overstating borrowers’ income and, at times, identifying assets which borrowers did not own. Additionally, construction loans offered by the financial institutions he was working with were intended to be used for homes occupied by borrowers as their primary residence as opposed to an investment intended to be resold at a profit shortly after the completion of construction, according to the indictment. Despite knowing some borrowers were not intending to use the home as a primary residence, Butcher falsified the application to show the property would be the borrower’s primary residence. The indictment also alleges he provided false employment information for borrowers. The indictment alleges eight counts of bank fraud and seven counts of false statements to a financial institution. The potential maximum penalty for each bank fraud count is 20 years in prison and a fine of $250,000. The potential maximum penalty for each false statement count is 30 years in prison and a fine of $1 million. Butcher will be issued a summons for an initial appearance in federal court. For more information, visit http://saltlakecity.fbi.gov.
Published
May 21, 2010
Fannie Mae Plans To Restart Credit Risk Transfers In 2021

Paused Since March 2020, New CRT Transactions To Begin In October

Regulation and Compliance
Sep 21, 2021
Biden Nominates McCargo To Lead Ginnie Mae

Currently Serves As Senior Advisor For Housing Finance At HUD

Regulation and Compliance
Sep 14, 2021
OCC Plans To Rescind 2020 CRA Rule

The OCC formally issued a proposal to rescind a controversial rule within the Community Reinvestment Act (CRA) that was published in June 2020.

Regulation and Compliance
Sep 10, 2021
CSBS Changes Servicer Liquidity Policy

CSBS And MBA Encourage States To Adopt Consistently

Regulation and Compliance
Sep 08, 2021
Flexibilities Move Forward

Pandemic Priorities Continue To Drive Industry Modernization

Regulation and Compliance
Sep 08, 2021
FHFA And The Enterprises Coordinate Action On Equitable Housing

Today the FHFA is announcing that Fannie Mae and Freddie Mac (the Enterprises) will submit Equitable Housing Finance Plans to the FHFA by the end of 2021.

Regulation and Compliance
Sep 08, 2021