The Federal Housing Finance Agency (FHFA) has referred New York State Attorney General Letitia James to the U.S. Department of Justice (DOJ) for potential criminal prosecution over alleged mortgage fraud.
In a letter obtained by White Collar Fraud and published this morning, FHFA contends “there are unfortunately too many examples of individuals who commit fraud or mortgage fraud,” and notes it's ready to assist the DOJ should the department decide to move forward with a criminal prosecution.
“As regulator of Fannie Mae, Freddie Mac, and the federal home loan banks, we take very seriously allegations of mortgage fraud or other criminal activity,” the FHFA letter underscores. The agency insists it “has identified matters that are appropriate for referral to the U.S. Department of Justice for consideration of criminal prosecution.”
In making its allegations, FHFA tapped its authority over Fannie Mae and Freddie Mac and cited forms from those entities and mortgage documents. FHFA claims that James, a Democrat, falsely identified a Norfolk, Virginia property as her primary residence in order to get a more favorable mortgage rate in financing it.
Specifically in the letter, FHFA alleges that James falsified bank documents and property records to acquire government-backed assistance and loans and more favorable loan terms, including that she:
- Falsified residence status for a Norfolk, Virginia-based home in order to secure a lower mortgage rate; and
- Misrepresented property descriptions of her Brooklyn, New York home to meet requirements for government-backed loans and government assistance.
According to FHFA, James purchased a property in Norfolk, Virginia in August 2023, and on a Fannie Mae/Freddie Mac form and in mortgage documents, “she reaffirmed this would be her primary residence, despite being a statewide public office holder in the state of New York at that same time and primarily residing in the state of New York.”
The FHFA letter stresses that primary residence mortgages receive more favorable loan terms, including lower interest rates, pointing out that interest rates for secondary residence mortgages typically are 25 to 50 basis points higher.
However, “at the time of the 2023 Norfolk, Virginia 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,” FHFA states.
Then, going back more than two decades regarding the Brooklyn, New York property, FHFA alleges in its letter that James purchased what is a five-family home in February 2001 and secured a conforming loan via Fannie Mae/Freddie Mac Form 3033, even though such loans are available only for homes with four units or less.
Buildings with more than four units must be treated as multifamily properties, which typically require larger down payments and are financed at higher interest rates to the tune of 75 to 100 basis points more, FHFA notes.
“Spanning the last two decades, Ms. James has consistently misrepresented the same [Brooklyn] property as only having four units in both building permit applications and numerous mortgage documents and applications,” the FHFA letter reads.
Thus, with both the Norfolk, Virginia and Brooklyn, New York properties, James “appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms,” contends FHFA.
Finally, the agency goes back over four decades in another allegation: that James falsified mortgage documents in claiming her father and she were husband and wife.
“In 1983 … Ms. James and her father signed mortgage documents that stated that they were husband and wife in order to secure a home mortgage,” the letter states. The two also listed themselves as married in documentation 17 years later in May 2000, FHFA alleges.
The FHFA letter, which is dated April 14, 2025 and addressed to U.S. Attorney General Pamela J. Bondi and U.S. Deputy Attorney General Todd Blanche, carries the signature of FHFA Director Bill Pulte. It was not available via FHFA’s news releases and other media assets at the time of this article's publication.
Note that while James is a Democrat and the current administration Republican, the DOJ's motto, "Qui Pro Domina Justitia Sequitur" or "Who Follows Lady Justice As His Sovereign," underscores that the DOJ is meant to prosecute for justice's sake — free from other motivations such as politics, political party, or personal agendas.
