Mortgage Daily Logo
mortgage news from industry experts

Minnesota Broker in Hot Water

Minnesota Broker in Hot Water21-count complaint issued against Daniel Butterfield

June 23, 2004


Minnesota regulators recently suspended the mortgage originator and real estate salesperson licenses of a man accused of stealing equity, committing fraud and lying.

In an order issued last month, the Minnesota Department of Commerce summarily suspended the two licenses of Daniel C. Butterfield. The Minneapolis man reportedly operated as a real estate agent under the names of three property-investment partnerships and claimed to own St. Paul-based Equistar Mortgage LLC.

The 21-count complaint accused Butterfield of engaging in equity stripping, breaching of fiduciary duties, incompetence, fraud, failing to provide disclosures to consumers, misrepresenting facts to the Department and violating its order to produce records, among other things.

The Department said it requires that real estate firms have a licensed broker in order to operate and licenses real estate agents or salespersons. Butterfield was licensed to act as a real estate salesperson on behalf of Leon Meuwissen, the broker of Equistar Real Estate LLC who consented to revocation of his broker license after the firm’s license was suspended in December 2003. Butterfield has not applied to transfer his license on behalf of another broker, according to the order.

Mortgage origination company owners also require a license, but not individual loan officers, according to the Department. Although Butterfield executed Equistar Mortgage’s license application and renewal listing himself as the owner, in a sworn statement to the Department he said the company had always been owned by his parents.

Equity strippers target homeowners on the brink of or in foreclosure, according to Department spokesman Patrick Sexton. “Essentially, when people get to foreclosure, they should sell their home and get equity from it, but that’s what equity strippers do.”

Equity strippers usually offer to help the homeowners remain in their property by paying off their mortgage, under the condition that they pay the house back. Often, “through different and vague terminology,” the owners are lead to believe the payments will apply toward the repurchase of the house, when in reality they’re paying rent. Also, repurchase transactions are usually done at market value, resulting in thousands of dollars above the mortgage balance, which ends up in higher payments than the owner originally was making. The owner eventually defaults and the equity stripper keeps the house with all its equity, Sexton said.

In the four consumer complaints outlined in the order, Butterfield allegedly lead foreclosure-troubled homeowners to believe he and Equistar would help them. However, he allegedly negotiated transactions that resulted in consumers paying thousands of dollars in fees, and in two complaints, losing a combined total of about $145,000 in home equity.

The Department said it had originally set the contested case hearing date on June 9, but it was postponed and no new date has been scheduled. Whether Butterfield can continue activity as a real estate agent and Equistar can continue originating mortgages remains to be seen as the hearing will resolve whether Butterfield’s licenses get revoked.

Coco Salazar is an assistant editor and staff writer for


Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts