New York Attorney General Letitia James has found herself at the center of a federal investigation following allegations of mortgage fraud. The Federal Housing Finance Agency (FHFA) has referred her case to the Department of Justice, claiming that James may have falsified records to secure favorable loan terms on properties in both Virginia and New York.
In a letter dated April 14, 2025, FHFA Director William Pulte outlined the allegations against James. He asserts that she incorrectly listed her Norfolk, Virginia property as her "principal residence" while simultaneously serving as the Attorney General of New York, a position that legally requires her to maintain her primary residence in New York State. Pulte's letter reveals that a building permit from July 2024 lists her New York property as the "JAMES RESIDENCE," indicating it was supposed to be occupied.
According to Pulte, James’s actions appear to be an attempt to obtain better mortgage rates by misrepresenting her residency status. The letter states, "At the time of the 2023 Norfolk, VA property purchase and mortgage, Ms. James was the sitting Attorney General of New York and is required by law to have her primary residence in the state of New York – even though her mortgage applications list her intent to have the Norfolk, VA property as her primary home." This misrepresentation could lead to charges of wire, mail, and bank fraud, among other potential violations of state and federal laws.
James’s office has vehemently denied the allegations. A spokesperson stated, "Attorney General James is focused every single day on protecting New Yorkers, especially as this Administration weaponizes the federal government against the rule of law and the Constitution. She will not be intimidated by bullies – no matter who they are." This statement reflects her ongoing battle against what she perceives as political retribution from the Trump administration.
The investigation into James comes on the heels of her successful civil fraud case against former President Donald Trump, which resulted in a ruling that found him liable for inflating the value of his properties to secure better loan terms. In February 2024, a judge ordered Trump to pay more than $350 million in damages, a decision he is currently appealing. The civil case against Trump was a culmination of years of investigations led by James, who has positioned herself as a fierce opponent of the former president.
In a recent Truth Social post, Trump referred to James as a "totally corrupt politician" and demanded her resignation, further fueling the narrative that the allegations against her are politically motivated. He wrote, "Letitia James, a totally corrupt politician, should resign from her position as New York State Attorney General, IMMEDIATELY. Everyone is trying to MAKE NEW YORK GREAT AGAIN, and it can never be done with this wacky crook in office." Trump's comments underscore his long-standing grievances against James, whom he has accused of using her office to pursue personal vendettas.
Pulte's referral letter also highlights specific instances of alleged misconduct. For example, he claims that James misrepresented a five-family property in Brooklyn as a four-unit building in order to qualify for a conforming loan, which is only available for properties with four units or less. This misrepresentation allegedly dates back to 2001, when she purchased the property.
Legal experts have noted the potential ramifications of these allegations. Nicole Brenecki, a New York City trial attorney, stated, "Ms. James brought a high-profile case against Donald Trump for civil fraud. Signing a false declaration to obtain any benefits generally constitutes civil fraud. As such, Ms. James will likely be scrutinized and criticized by her political opponents for doing exactly what she accused Trump of in that case." The scrutiny surrounding James is compounded by the fact that she has built her career on exposing deception in financial dealings.
While James has not yet been formally charged with any crime, the referral to the DOJ indicates that the allegations are being taken seriously. The outcome of this investigation could have significant legal and political implications for James, particularly as she continues to navigate her role as a prominent figure in the ongoing legal battles involving Trump.
As this story develops, it remains to be seen how the Justice Department will respond to the FHFA's referral and whether any formal charges will be filed against James. The political landscape in New York and beyond is charged with tension as the investigations unfold, with both sides accusing each other of weaponizing the legal system for political gain.
In the meantime, James's office continues to assert her commitment to her role as Attorney General, emphasizing her focus on protecting the interests of New Yorkers. However, the allegations of fraud loom large, casting a shadow over her future and her ongoing legal battles with Trump.
