New York Attorney General Letitia James is facing serious allegations of mortgage fraud that could lead to federal prosecution. On April 15, 2025, the Federal Housing Finance Agency (FHFA) Director William Pulte sent a letter detailing accusations against James to Attorney General Pam Bondi and Deputy AG Todd Blanche. The letter claims that James misrepresented her residency status to secure favorable mortgage rates on two properties, one of which is located in Virginia.
According to the letter, James falsely claimed that the Virginia property was her "principal residence" in 2023, just weeks before she initiated her civil fraud trial against the Trump Organization. This trial resulted in a significant $454 million judgment against Trump for inflating property values. Pulte's letter indicates that James's actions may constitute various forms of fraud, including wire fraud, mail fraud, and bank fraud.
In addition to the Virginia property, James is accused of repeatedly misclassifying a five-family dwelling in Brooklyn as a four-unit structure in official documents. This misrepresentation allegedly allowed her to secure more favorable loan terms. The FHFA's referral also noted that James and her father were listed as "husband and wife" on mortgage applications for properties purchased in 1983 and 2000, raising further concerns about the validity of her mortgage applications.
James granted power of attorney to her relative, Shamice Thompson-Hairston, to facilitate the purchase of the Virginia property. This property was acquired for $240,000 with a $218,780 mortgage. Loans secured for the property could have potentially reduced her mortgage interest rate by as much as 1% under the federal Home Assistance Modification Program (HAMP). Pulte stated in his letter, "Ms. James, for both properties listed above, appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms."
The allegations come at a time when James has been a vocal critic of former President Donald Trump, having spearheaded multiple legal actions against him and his business dealings. In 2022, she filed a civil fraud lawsuit against Trump, leading to the recent judgment that ordered him to pay a hefty sum for his misleading financial practices.
Trump has responded vehemently to the allegations against James. On his social media platform, Truth Social, he labeled her a "totally corrupt politician" and called for her immediate resignation. He stated, "Everyone is trying to MAKE NEW YORK GREAT AGAIN, and it can never be done with this wacky crook in office." This rhetoric reflects Trump's ongoing animosity towards James, who he believes is targeting him politically.
Legal experts suggest that the allegations against James could have significant ramifications. Former federal prosecutor Neama Rahmani noted that New York law stipulates that an elected official must maintain their residency within the state. If James is found to have established her principal residence in Virginia, it could render her position as Attorney General vacant. Rahmani emphasized that the potential for mortgage fraud exists due to the lower rates typically available for primary residences compared to secondary properties.
Additionally, the legal implications of these accusations could extend beyond mere residency issues. There is potential for tax fraud investigations, as individuals often claim different residences in states with lower tax rates. Rahmani remarked, "There's obviously no question that Letitia James is a target of Donald Trump. And the issue with the last two crimes is that they're federal crimes. So, she could be prosecuted by the DOJ for something like that."
James's office has not publicly commented on the referral or the allegations. The DOJ has yet to indicate whether they will pursue an investigation into the matter. Legal analysts are closely watching the situation, as it unfolds alongside Trump’s ongoing legal battles.
Jonathan Turley, a law professor and Fox News contributor, discussed the irony of James facing accusations of falsifying records given her previous prosecutions against Trump. He stated, "This is a person who prosecuted Trump for everything short of ripping a label off a mattress, and among the charges that were brought in New York, in just the civil but the criminal case, was making false or misleading statements to financial institutions." Turley further explained that if James's own standards were applied, her case appears straightforward.
As the situation develops, James's political opponents are likely to scrutinize her actions closely. Nicole Brenecki, a trial attorney, pointed out that while the civil case against Trump may not have direct legal ramifications for James, it could have significant political consequences. She noted, "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."
In light of these developments, the future of James's political career may hinge on the outcome of these allegations. The mortgage company involved may also pursue damages if it can be proven that James obtained a lower interest rate through false declarations. However, Brenecki cautioned that pursuing litigation in such cases can be costly and time-consuming.
James, who has served as New York's Attorney General since 2019, is the first African American and first woman to hold this position. She has gained national attention for her aggressive legal actions against Trump and his associates. As this latest chapter unfolds, the intersection of law and politics remains a critical focus for both supporters and critics of James.
The allegations against Letitia James highlight the complexities and challenges faced by public officials in maintaining transparency and integrity, especially when entangled in contentious political landscapes. As both sides prepare for potential legal battles, the public will be watching closely to see how this situation evolves.
