In recent weeks, President Donald Trump’s administration has levied mortgage fraud allegations against three Democratic officials.
The latest came Wednesday, when Trump, who has been sharply critical of the Federal Reserve’s interest rate policies, posted to his Truth Social platform that Federal Reserve Governor Lisa Cook “must resign, now!!!”
His post came after William Pulte, the director of the Federal Housing Finance Agency, alleged in a letter to Attorney General Pam Bondi that Cook, who was nominated by President Joe Biden, “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud.” Pulte’s letter claimed that Cook falsified her residence statuses for her properties in Ann Arbor, Michigan, and Atlanta.
The move followed recent efforts targeting Sen. Adam Schiff, D-Calif., who was a leading figure in Trump’s impeachments, and New York Attorney General Letitia James, who successfully sued Trump and his company over what her office said were fraudulent misrepresentations of his wealth and financial statements that he used to get favorable rates on bank loans and insurance policies that he otherwise would not have been able to obtain.
A judge awarded James’ office over $300 million in the case, an amount that has since ballooned to over $500 million with interest. Trump has called the case “a fraud on me” and is appealing the judgment. On Thursday, an appeals court threw out that judgement.
This month, NBC News reported that Bondi appointed Ed Martin, a conservative activist and former interim U.S. attorney for Washington, D.C., as a “special attorney” to probe mortgage fraud allegations against Schiff and James. At the time, a senior law enforcement official told NBC News that a grand jury in Virginia will investigate the allegations against James, while a grand jury in Maryland will take up the Schiff allegations. Trump had called for both officials to be prosecuted over the allegations.
Schiff, James and now Cook have all denied any wrongdoing. The White House referred questions to the Federal Housing Finance Agency, which declined to comment.
Making an allegation of mortgage fraud has long been a common tactic in opposition research on political campaigns.
A Republican campaign veteran told NBC News that searching for inconsistencies in where candidates declare their “primary” residences is among the first tasks for opposition researchers. It is an issue relevant to elected officials who split their time between their home states and Washington. This person said it is a frequent issue in campaigns on both sides, and the penalty tends to be a fine, not jail time.
Last year, Sen. Angela Alsobrooks, D-Md., then a candidate for office, faced a $47,000 bill in Washington, D.C., after it was discovered she wrongly received property tax credits she improperly claimed on a home she had rented out.
“It looks sloppy,” this person said. “But I don’t think we’ve ever had anyone screw up their life on this. It just looked bad.”
Now, the Trump administration is giving such allegations against Democrats special attention.
At the same time, The Associated Press reported that Texas Attorney General Ken Paxton, a Trump ally who is running for the Senate, and his wife, Angela, made inaccurate statements on mortgage applications claiming that three separate properties were each their primary residence. The Trump administration has not said whether Paxton is under similar investigation.
In a letter to Martin on Monday, James’ lawyer, Abbe Lowell, pointed out the potential inconsistency in enforcement actions.
“Notably, absent from your mandate is Kenneth Paxton (Republican Attorney General of Texas). Given that the same news reports raising questions about Ms. James and Mr. Schiff have reported that, somehow, Mr. Paxton has three different properties that he claims to be his ‘primary residence,’ it seems to indicate your title ought really be, ‘Special Assistant for Mortgage Fraud [Alleged Against Democrats Adverse to President Trump],’” he wrote.
Pulte said in an interview with CNBC on Wednesday that the administration’s probes of the allegations of mortgage fraud were free from political considerations.
“We will look at any allegation of mortgage fraud,” he said. “And we do not care whether you’re a Republican, a Democrat. We do not care whether you’re wealthy. We don’t care whether you’re a prosecutor. We don’t care whether you’re a Fed governor, if you commit mortgage fraud and you present an existential threat to the Federal Home Loan Banks, Fannie or Freddie, we are going to prosecute it, period.”
Cook, the first Black woman to serve on the Fed’s Board of Governors, said in a statement Wednesday that she learned from news reports that Pulte had made a criminal referral against her “based on a mortgage application from four years ago, before I joined the Federal Reserve.”
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
Later Wednesday, Sen. Elizabeth Warren, D-Mass., said the episode amounted to the latest example of the Trump administration’s trying to pressure the Federal Reserve.
“I’ve long been an advocate for holding Fed officials accountable,” Warren, the ranking member of the Senate Banking Committee, said in a statement. “But anyone can see that for months now, President Trump has been scrambling for a pretext to intimidate or fire Chair Powell and Members of the Federal Reserve Board while blaming anyone but himself for how his failed economic policies are hurting Americans. The President and his Administration should not weaponize the Federal government to illegally fire independent Fed Board members.”
