New York Attorney General Letitia James Referred to DOJ for Alleged Mortgage Fraud

New York Attorney General Letitia James, a nationally prominent Democrat known for her aggressive legal pursuit of former President Donald Trump, is facing a federal criminal referral for alleged mortgage fraud. The referral, submitted by Federal Housing Finance Agency (FHFA) Director William Pulte, accuses James of falsifying records to secure favorable loan terms on multiple properties, including a Virginia residence she claimed as her principal home while serving as New York’s top prosecutor.

Allegations Detailed

According to documents obtained by several news outlets, the FHFA’s referral to the Department of Justice centers on two main claims:

• James allegedly declared a Norfolk, Virginia property as her “principal residence” in 2023, despite her ongoing, highly visible duties as New York Attorney General at the time. A power of attorney signed by James in August 2023 explicitly states her intent to make the Virginia house her principal residence, a declaration required to qualify for certain mortgage benefits. The mortgage terms mandated that both co-owners establish the property as their primary residence within 60 days and maintain it for at least a year—a period that overlapped with James’ leadership of the Trump civil fraud trial in Manhattan.
• The referral also asserts that James misrepresented a Brooklyn property purchased in 2001, consistently listing it as a four-family residence in building permit applications and mortgage documents, despite records showing it was a five-family home. This alleged misrepresentation could have enabled her to secure a lower mortgage rate and reduced monthly payments under federal home loan programs.

Additionally, the FHFA letter highlights an earlier transaction in which James and her father, acting as co-signers, were listed as “husband and wife” on mortgage documents in 1983 and 2000, another potential case of falsified records.

Legal and Political Ramifications

Legal experts note that if substantiated, these allegations could expose James to federal prosecution for mortgage fraud, as well as possible violations of New York’s strict residency requirements for elected officials. Under state law, officeholders must maintain residency within New York; declaring principal residency elsewhere could trigger automatic vacancy of her office.

“This could pose a significant issue for Letitia James,” said former federal prosecutor Neama Rahmani, noting the potential for both criminal and civil consequences. “There’s a possibility of mortgage fraud since mortgage rates for primary residences are typically lower than those for secondary homes. She may have declared this as her primary residence to secure a more favorable mortgage”.

The political stakes are also high. James has been a frequent legal adversary of Donald Trump and his administration, leading high-profile lawsuits and securing a $454 million civil fraud judgment against Trump, which is currently under appeal. Trump and his allies have seized on the allegations, with the former president calling for James’ immediate resignation and highlighting what they see as a double standard in the prosecution of financial crimes.

Response and Next Steps

As of Tuesday night, James’ office has not issued a public response to the allegations. The Department of Justice has also declined to comment on the status of any potential investigation.

The story is rapidly developing, with legal analysts and political observers watching closely to see whether the DOJ will pursue charges and how the controversy may affect James’ tenure and ongoing legal battles.

Background

Letitia James, the first Black woman elected to statewide office in New York, has served as Attorney General since 2019. Her tenure has been marked by high-profile legal actions against Trump and other political figures, making her a polarizing figure in national politics.

The coming days are expected to bring further scrutiny of the mortgage documents, James’ residency status, and the broader implications for New York’s political landscape.