U.S. v. Phillips

In prosecution on charge under 18 USC section 1014 that defendants made knowingly false statements regarding their income to bank in order to obtain home mortgage, Dist. Ct. erred in excluding evidence that mortgage broker told defendants that including non-borrower’s income in “borrower’s income” blank on mortgage form was not improper since bank only cared about total income available to service loan, and since non-borrower’s income was “available” because non-borrower was borrower’s future spouse. Said evidence was not hearsay since it was only offered to show defendants’ understanding of term “borrower’s income” in instant loan application, and such evidence was relevant on issue as to defendants’ belief that inclusion of non-borrower’s income was not false statement. Moreover, record contained evidence that bank did not care if defendants had ability to repay loan since bank had primary intent to package instant mortgage with others for resale as mortgage security. (Dissent filed.)