In a move that’s sent shockwaves through Washington and the financial world, President Donald Trump is seeking to fire Federal Reserve governor Lisa Cook over allegations of mortgage fraud—a charge Cook vehemently denies and promises to fight. The high-stakes drama, unfolding in late August 2025, is more than just a personnel spat. It’s exposing deep political rifts, raising questions about the independence of America’s central bank, and shining a spotlight on the murky world of mortgage paperwork and political score-settling.
At the center of this controversy is the accusation that Cook, an economist serving on the Federal Reserve’s board, designated two separate homes as her primary residence on mortgage applications submitted just 14 days apart. According to the Wall Street Journal, this type of misrepresentation is known as mortgage occupancy fraud—when a borrower claims a property is their main home, but it’s actually a second home or an investment. The potential consequences for such a misstep are serious: federal penalties can reach up to 30 years in prison and $1 million in fines, though actual prosecutions are rare.
But the story doesn’t end with paperwork. The allegations against Cook were first amplified by Bill Pulte, the 37-year-old head of the Federal Housing Finance Agency (FHFA), who took to social media to accuse her of fraud. Pulte, whose aggressive online persona has earned him the nickname “mini-Trump,” posted side-by-side screenshots of Cook’s mortgage signatures, labeling them “FRAUD AT THE FEDERAL RESERVE.” As Mother Jones reports, this was just the latest in a series of attacks by Pulte on political opponents of Trump, including New York Attorney General Letitia James and Senator Adam Schiff of California—both of whom are also under Justice Department investigation for similar mortgage-related claims, and both deny any wrongdoing.
Cook, for her part, has categorically denied the allegations. “I will fight the firing action,” she declared, according to multiple outlets. Legal experts point out that there are legitimate scenarios where someone might have two mortgages listing both homes as primary residences, especially if the purchases are separated by enough time or triggered by life events like a job transfer or divorce. “Intent is what’s key,” explained Jon Goodman, a lawyer specializing in mortgage fraud, to the Wall Street Journal. “People should be planning to move into a primary home within 60 days, and live there at least a year. But there may be legitimate reasons for needing to move more quickly.”
Yet the political overtones of this episode are impossible to miss. Bill Pulte’s own background is steeped in real estate and political intrigue. As Mother Jones revealed, his wife, Diana Pulte, donated $500,000 to a Trump super PAC through a Delaware shell company he controlled—an arrangement that drew scrutiny from the Federal Election Commission (FEC). While the FEC ultimately found no violation by Pulte himself, the episode raised eyebrows about transparency and influence. “The FEC looked at the issue and determined that there was no violation by Director Pulte,” an FHFA spokesperson said. “He was 100 percent compliant. Anything else is Fake News, an attempt to smear Director Pulte and distract from serious mortgage fraud. SAD.”
Pulte’s crusade against mortgage fraud has also drawn criticism for its apparent selectivity. Although he claims to be leading a broad crackdown, so far his public accusations have focused exclusively on prominent Democrats. Critics—including Senator Elizabeth Warren—have accused him of weaponizing his position at FHFA to aid Trump’s political agenda rather than focusing on the agency’s core mission: addressing the nation’s housing affordability crisis. In a recent letter, Warren lambasted Pulte for “making little progress on problems, like housing affordability and homeownership access, that are in his agency’s purview,” and instead using his platform to attack Trump’s adversaries.
Adding another layer to the controversy, Pulte has denied using his FHFA authority to dig up dirt on political opponents, insisting that his agency is simply reviewing mortgage data for signs of fraud. He recently brought in Palantir, the data analytics firm founded by Peter Thiel, to comb through Fannie Mae’s loan files for irregularities. Yet, as Bloomberg noted, the only fraud cases he’s highlighted involve Democrats, and he’s ignored similar allegations against Trump allies like Texas Attorney General Ken Paxton.
The irony isn’t lost on observers. Only last year, a New York judge found Trump himself liable for major mortgage fraud, after prosecutors proved he’d inflated the value of his real estate holdings. Although an appeals court recently threw out a $550 million civil fine against the former president, the underlying finding of fraud remains, and Trump is appealing. “Pulte’s abuse of office is a far, far greater offense than any personal mortgage occupancy fraud by a federal official,” argued Adam Levitin, a Georgetown law professor, in a recent commentary.
Meanwhile, the legal and financial nuances of mortgage occupancy fraud remain complex. Lenders offer better terms for primary residences—lower down payments, lower interest rates, and often more favorable tax treatment—making it tempting for some to fudge the facts. According to Garth Graham, a senior partner at the mortgage advisory firm Stratmor Group, rates for second homes and investment properties can run 0.25% to 0.75% higher than for a primary residence. Nonowner-occupied properties also tend to carry higher property taxes and insurance premiums.
But how common is this kind of fraud? The Federal Reserve Bank of Philadelphia found that occupancy misrepresentation peaked at 6.8% during the 2006 housing bubble, then dropped to between 2% and 3% in the years since. The rise of remote work has made it harder for lenders to verify where borrowers actually live, further muddying the waters. As for the public, only certain mortgage details—like loan amounts and lenders—are recorded with local governments. The intended use of the property isn’t typically public, making it unclear how Pulte and his team obtained the information on Cook’s mortgages in the first place.
All of this is playing out against a backdrop of turmoil at the agencies overseeing America’s housing market. Pulte, who took over the FHFA after his wife’s donation to Trump’s PAC, has made himself chairman of the boards of both Fannie Mae and Freddie Mac, ousted top executives, and is pushing for a controversial public stock offering of these mortgage giants. Critics warn that such a move could make housing even less affordable for ordinary Americans, as these government-owned entities would face new pressures to deliver profits to shareholders.
As the saga unfolds, one thing is clear: the battle over Lisa Cook’s future at the Federal Reserve is about much more than a few lines on a mortgage application. It’s a high-stakes clash over political power, financial regulation, and the future of America’s housing system—one that’s likely to reverberate far beyond Washington’s corridors in the months ahead.
