On September 9, 2025, the simmering debate over political bias in federal investigations burst into the open, as allegations of mortgage fraud swept across both Democratic and Republican ranks in Washington. According to Reuters, President Donald Trump’s allies have pressed the Department of Justice (DOJ) to investigate and potentially charge Federal Reserve Governor Lisa Cook, New York Attorney General Letitia James, and U.S. Senator Adam Schiff—three prominent political foes—with crimes related to misstating their primary residences on mortgage applications. These charges, rarely prosecuted by the federal government, have sparked a fierce debate about selective enforcement, fairness, and the weaponization of prosecutorial discretion.
Reuters reviewed more than 600 federal cases involving false statements to lending institutions since 2017 and found that only 20 resulted in criminal charges for misstatements on mortgage applications. Of those, just one case involved a standalone charge for such a misstatement. The rest were part of broader criminal schemes, such as drug cultivation or bank fraud. Legal experts highlighted the unusual nature of these charges. Matthew Edwards, a law professor at the Zicklin School of Business at Baruch College and an expert on mortgage fraud, told Reuters, "Federal prosecutors would rarely, if ever, bring federal fraud charges against a single borrower who makes this type of misrepresentation."
The investigations into Cook, James, and Schiff were reportedly initiated after referrals from Federal Housing Finance Agency (FHFA) Director William Pulte. Pulte, who has posted regularly about the allegations on social media, insisted that the government is not selectively targeting Trump’s opponents. On August 26, 2025, Pulte declared on X, "Contrary to what the fake news media says, US Federal Housing FHFA has criminally referred people of each political parties. We are focused on prosecuting mortgage fraud out of our system." The FHFA has not clarified which Republicans, if any, have been referred for investigation.
Yet, the issue of political bias has not faded. On September 8, 2025, the Campaign for Accountability, a liberal ethics watchdog, filed a complaint with the DOJ, alleging that three of President Trump’s Cabinet secretaries—Transportation Secretary Sean Duffy, Labor Secretary Lori Chavez-DeRemer, and Environmental Protection Agency Administrator Lee Zeldin—as well as Texas Attorney General Ken Paxton, a Republican, had engaged in similar conduct. The group cited Pulte’s recent comments and urged Attorney General Pam Bondi to initiate a criminal investigation. "If somebody is claiming two primary residences, that is not appropriate, and we will refer it for criminal investigation," Pulte had said in August, as reported by the watchdog’s complaint.
The complaint, which runs five pages, asserts, "Secretary Chavez-DeRemer, Secretary Duffy, Administrator Zeldin, and Attorney General Paxton appear to have engaged in conduct nearly identical to that for which Mr. Pulte referred Governor Cook and for which the department is now investigating Governor Cook, Senator Schiff, and Attorney General James. All that readily distinguishes those who are under criminal investigation from those who are not is political affiliation: Democratic officials are under investigation while Republican officials are not."
According to recent reporting by ProPublica, Duffy, Chavez-DeRemer, and Zeldin each listed two homes as their primary residences on loan records. Paxton and his wife reportedly have one home in Dallas and two in Austin listed as their primary residence and may have violated mortgage terms on two other properties, including a luxury cabin in Oklahoma. The Paxtons are expected to divorce, adding another layer of complexity to the case. The Campaign for Accountability’s complaint asks the DOJ to determine whether these officials engaged in wire fraud, mail fraud, bank fraud, made false statements to a financial institution, or violated any other relevant state and federal laws.
For their part, Duffy, Chavez-DeRemer, and Zeldin have denied wrongdoing. The White House dismissed ProPublica’s reporting as "just another hit piece from a left-wing dark money group that constantly attempts to smear President Trump’s incredible Cabinet members." Paxton has not publicly responded to the allegations regarding his mortgage documents.
The Democrats under investigation have also pushed back. Cook, James, and Schiff have all denied any wrongdoing. Cook, who owns properties in Michigan, Georgia, and Massachusetts, was terminated by Trump last month over the allegations and has since filed a lawsuit challenging her firing. The Justice Department has issued grand jury subpoenas in its probe of Cook, Reuters reported. Cook’s lawyer, Abbe Lowell, told Reuters that the DOJ was "scrambling to invent new justifications for Trump’s overreach in firing the Fed governor. He wants cover, and they are providing it."
Senator Schiff’s office stated that the lenders who provided mortgages for his homes in California and Maryland were aware that he used both year-round. His lawyer, Preet Bharara, said, "The allegations against Senator Schiff are transparently false, stale and long debunked." Letitia James’s lawyer, also Abbe Lowell, argued that James mistakenly stated in a mortgage application that a Virginia property would be her primary residence, but made it clear in other documents that it would not be, and that her broker understood this.
Under U.S. law, knowingly making a false statement to a federally insured bank to secure a loan is a felony punishable by up to 30 years in prison. However, legal experts caution that any successful federal mortgage fraud prosecution would need to demonstrate that the loan recipient knew they were lying about a home being their primary residence. Simply submitting incorrect information, they say, would not be enough to secure a conviction.
The rarity of such charges is striking. The only time the federal government has brought a standalone criminal charge for misstating a primary residence was in 2017. In that case, a man falsely claimed a Puerto Rico property as his primary residence to secure a $203,605 reverse mortgage. He pleaded guilty in 2021, refunded the money, paid a $7,500 fine, and did not serve prison time. Other cases involving such misstatements typically included broader criminal conduct, such as growing marijuana or bank fraud.
Stewart Sterk, a professor at Cardozo Law in New York, commented to Reuters, "If the prosecutorial discretion is being used as a political weapon by either party, whether it's by Republicans or Democrats, that's a very troublesome problem." The current wave of investigations, he suggested, could signal a dangerous tit-for-tat escalation in how laws are enforced in Washington.
Trump, meanwhile, has continued to publicly criticize James and Schiff for their roles in past legal actions against him, including James’s civil fraud lawsuit and Schiff’s leadership in the House impeachment inquiry. The DOJ’s actions come amid Trump’s ongoing efforts to pressure the Federal Reserve to lower interest rates, a move that has drawn scrutiny from both political allies and opponents.
As the investigations proceed, the debate over selective enforcement and political retribution shows no signs of abating. With both parties now facing allegations and calls for accountability, the question remains: will the law be applied evenly, or will partisan lines continue to dictate who finds themselves under federal scrutiny?
For now, the eyes of the nation—and the capital—are fixed on the DOJ, as it navigates one of the most politically charged mortgage fraud probes in recent memory.
