Trump’s Allies Push Mortgage-Fraud Probes of Political Foes

President Donald Trump and his allies have attacked three Democrats over suspected mortgage fraud.

Over the last few months, Trump has claimed California Senator Adam Schiff, Federal Reserve governor Lisa Cook and New York Attorney General Letitia James have committed the crime. All three have all denied wrongdoing.

Newsweek contacted representatives for all three as well as the Justice Department and the Federal Housing Finance Agency to comment on this story.

Why It Matters

The attacks reflect the highly divided political environment in the United States. Republicans frequently seek to undermine their Democratic opponents by accusing them of wrongdoing, whereas Democrats too have launched legal and political attacks on GOP politicians.

What To Know

James was referred by the Federal Housing Finance Agency (FHFA) to Attorney General Pam Bondi and Deputy Attorney General Todd Blanche regarding allegations she falsified records to help obtain a mortgage in 2023. The Justice Department launched a criminal investigation into James in May.

In July, Trump said Schiff should “pay the price of prison” for alleged mortgage fraud. The Justice Department received a criminal referral for Schiff from the Federal Housing Finance Agency in July. The president accused Schiff of improperly declaring a house he owned in Maryland as his primary residence to get a lower mortgage rate. Schiff called the attack a “baseless attempt at political retribution.”

On Wednesday, Trump called on Cook to resign after Federal Housing Finance Authority director William Pulte sent a “criminal referral” to Attorney General Pam Bondi, accusing Cook of mortgage fraud. Neither Bondi nor the Justice Department has announced if they plan to open a criminal investigation into Cook.

Texas Attorney General Ken Paxton, a Republican, has also been accused of making inaccurate statements about his primary residence to secure low interest rates, according to an Associated Press review of public records. The Trump administration has not said whether Paxton is to be investigated. Newsweek contacted representatives for Paxton by email to comment on this story.

In a letter to Ed Martin, Trump’s special assistant for mortgage fraud, James’ lawyer Abbe Lowell suggested the accusations were politically motivated.

“While professing to be acting to address “mortgage fraud,” Attorney General Bondi and you have stated that your targets are Ms. James (Democratic Attorney General of New York) and Adam Schiff (Democratic Senator of California). 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].”

But Pulte said in a CNBC interview on Wednesday that the administration would investigate people regardless of their political affiliation.

“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.”

What People Are Saying

Lisa Cook, Federal Reserve governor, said in a statement on Wednesday, “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.”

Kyle Welch, an Associate Professor at George Washington University’s School of Business who specializes in financial fraud, told Newsweek: “Claiming two different houses as your ‘primary residence’ is like claiming you have two firstborn children—it just doesn’t work that way. The scrutiny here is about whether they misrepresented their residences to secure favorable mortgage terms. That’s serious if true—mortgage fraud statutes aren’t trivial. But much like Democrats put Trump under a microscope, these cases look like the opposition returning the favor. Just as many of Trump’s cases would never have seen a courtroom if he weren’t president, these are moving forward for similar reasons.”

in particular, some of these voices were the most adamant in the most Politically motivated cases against Trump. These Politicians want all the popcorn when the movie’s about Trump, but suddenly hate the theater when it’s their turn to be on the screen.

What Happens Next

Whether the attacks on Democrats result in any substantial legal action remains to be seen.