The last of four defendants in a multimillion-dollar South Sound mortgage loan fraud scheme Friday pleaded guilty to a single charge of conspiracy to submit false statements in a loan application.
Sonja L. Lightfoot entered the guilty plea before Tacoma U.S. District Judge Benjamin Settle on Friday afternoon. Lightfoot, 53, is a former vice president and residential loan manager at Pierce Commercial Bank.
That bank collapsed three years ago under a mountain of defaulted home loans.
Lightfoot was one of three lesser players swept up in the government’s investigation and prosecution of mortgage loan wizard Shawn Portmann. Portmann pleaded guilty to two charges earlier this week in connection with that same scheme.
The government charged that Portmann created false employment and income records and coached loan customers to declare that they intended to occupy the homes they were buying although they wouldn’t be living in the homes.
During his career generating loans for Pierce Commercial Bank, Portmann and his associates created loan applications for nearly $1 billion in home financing deals.
Lightfoot’s attorney, Bryan Hershman, told Settle that Lightfoot and her family spent many hours pondering whether she should take the plea bargain or go to trial.
“This one of the most agonizing processes I’ve gone through in my career as an attorney,” said Hershman.
The plea bargain doesn’t specify what sentence the federal prosecutor will recommend to Settle at the Jan. 14 sentencing. Hershman said he will argue for no jail time.
The Tacoma lawyer said his client never saw the fraudulent paperwork Portmann created. It was her job, said the attorney, to sell those loans on the secondary market to other banks and financial institutions.
“She never saw their files,” said Hershman. “She would get a list faxed to her with dozens of names of loan applicants.”
Portmann ran his own loan generation office called PC Bank Home Loans in Puyallup. He employed both the loan originators and the underwriters whose job it was to double-check the financial details of the loan package and approve or reject them. Once those loans had cleared his underwriters, he would forward the loan packages sans documentation to the bank for funding or sale to other banks.
The government contends in the plea agreement that Lightfoot knew that Portmann submitted more than one loan application from the same individual to buy multiple residences. Lightfoot should have known that the prospective buyer could not have both of them as a primary residence although he had told the bank in each case that he intended to live in the house he wanted to finance.
Buyers who live in a home as their primary residence get better loan terms than those who buy the same home as a rental.
Two other defendants in the fraud case, Adam Voelker and Jeanette Salsi, earlier this month entered plea bargains of their own.
Portmann’s plea bargain deal, the government has said, would have been withdrawn unless the other three entered guilty pleas.