Federal Reserve Governor Lisa Cook is accused of falsely claiming two houses as her major residence to safe higher mortgage phrases. But paperwork reviewed by NCS present that Treasury Secretary Scott Bessent and Labor Secretary Lori Chavez-DeRemer did the identical — taking out two mortgages in one yr, showing to checklist each houses as major residences.
Yet Cook is the just one under investigation by the Trump administration for mortgage fraud.
On paper, the mortgage paperwork could seem to lift crimson flags, since a borrower isn’t supposed to carry two principal-residence mortgages without delay. But whereas their conditions differ, all three deny wrongdoing, and every has proof to again their claims, together with paperwork suggesting Cook advised her lender one property was a trip residence, not a major residence.
With help from Federal Housing Finance Agency Director Bill Pulte and Palantir’s synthetic intelligence, the administration has combed mortgage data to lodge fraud allegations that seemingly goal political opponents: Pulte has additionally referred to as for mortgage fraud investigations into Democratic Sen. Adam Schiff of California and New York Attorney General Letitia James, each of whom have denied wrongdoing.
In Cook’s case, the scrutiny falls on a Federal Reserve Board governor, a place Trump has sought to affect in his push to decrease rates of interest.
Labeling a property as a principal residence when taking out a residence mortgage can present the borrower with a decrease mortgage fee or a smaller required down cost. But just one residence can qualify at a time, except there are extenuating circumstances, reminiscent of relocating for a new job. Intentionally claiming in any other case means deceptive the lender and breaking the phrases of the mortgage settlement.
According to a NCS review of publicly available county documents, Cook took out two mortgages in shut succession in 2021. First, in June, for a residence in Ann Arbor, Michigan. Then, in July, with a separate lender, for an Atlanta apartment. The mortgages include almost similar language, requiring the borrower to vow they’d stay in the residence as a “principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing.”
That wording isn’t distinctive to Cook’s residence loans. It comes straight from the standard forms developed by Fannie Mae and Freddie Mac, which most lenders use for typical mortgages.
Pulte has seized on that language to accuse Cook of fraud, resulting in her firing by Trump final month. Cook has pushed again in courtroom, and after a judge temporarily reinstated her, the administration has appealed to the Supreme Court.
Bessent, Chavez-DeRemer and Cook every had completely different circumstances, however taken collectively their instances present that the public report presents solely a partial view, making it almost inconceivable to know from county paperwork alone whether or not fraud occurred.
In 2007, whereas dwelling in New York City, Bessent took out two mortgages on the identical day, each for trip houses. One for a residence in Provincetown, Massachusetts, and one for a residence in Bedford, New York. Each of the loans was over $10 million.
The county mortgage paperwork for each houses, that are publicly out there and had been seen by NCS, state that every residence could be a major residence for at the very least one yr, except the lender agrees in any other case.
However, there was a key distinction between Bessent’s mortgages and Cook’s: Bessent had the identical lender, Bank of America, for each loans.
It is unclear why Bessent’s mortgage paperwork talked about the houses could be designated as major residences. Representatives for Bessent offered NCS with a assertion from Bank of America stating that it was “well aware” that each houses could be used as secondary houses. The assertion additionally mentioned that for the mortgage product Bessent obtained, rates of interest for each loans wouldn’t have modified if the residence was used as a major residence or a secondary residence.
NCS additionally seen a nonpublic mortgage utility and an undated rider that appeared to point out that Bank of America had identified that Bessent’s houses could be secondary residences.
It is unclear whether or not Cook had comparable nonpublic disclosures, however an unofficial mortgage estimate for Cook’s Atlanta apartment, first reported by Reuters however seen by NCS, reveals that Cook’s lender might have been conscious that the residence was a secondary property in spite of everything.
In May 2021, lower than two months earlier than Cook signed a mortgage settlement on her Atlanta property, the doc from Cook’s mortgage lender, Bank-Fund Staff Federal Credit Union, listed the property’s use as a “vacation home.” Bank-Fund Staff Federal Credit Union didn’t reply to a request for extra data.
Patrick Delahunty, a former federal prosecutor who now works as an legal professional targeted on white-collar legal investigations and isn’t related to any of the officers talked about in this story, mentioned that in figuring out whether or not fraud was dedicated, it is important to think about what the lender knew.
“The bank needs to know what the risk profile is on the loan. It’s a safer loan if it’s a primary residence than a secondary residence,” Delahunty mentioned. “If the bank knew one way or another that the property was going to be used as a secondary residence or a vacation home, that’s really what matters, because they would have known how to assess the risk of the loan and what interest rates to offer.”
On social media, Pulte argued that the existence of such a mortgage estimate doc doesn’t clear Cook’s title, although.
“The fact that Lisa Cook may have had a loan estimate with a so-called vacation home, and then took out a primary mortgage, I believe shows further intent to defraud,” he wrote final week.
Cook’s attorneys mentioned the authorities was disregarding details in her case.
“The government continues to ignore the facts that have been publicly reported on and cited in our briefs that refute their allegations against Governor Cook,” Cook’s legal professionals mentioned in a assertion offered to NCS final week. “The attempt to remove Governor Cook is based on cherry-picked social media posts from the FHFA Director that collapse under basic scrutiny.”
Like Cook, Chavez-DeRemer took out two loans in 2021, in accordance with publicly out there paperwork seen by NCS. Both of Chavez-DeRemer’s mortgages included a clause stating that the houses had been to be principal residences – almost similar language to that in Cook’s and Bessent’s mortgage agreements.
Courtney Parella, a spokesperson for Chavez-DeRemer, mentioned the Labor Secretary and her husband, Shawn DeRemer, refinanced their longtime Oregon residence in January 2021. In March, the couple determined to retire and bought a residence in Arizona, meaning to make that their major residence as a substitute. However, Chavez-DeRemer bought a name to run for Congress in Oregon later that yr, which delayed her retirement. The spokesperson mentioned that Shawn DeRemer “continued to move forward with the process of becoming a legal AZ resident.”
Delahunty mentioned that a change in a particular person’s employment scenario, main them to vary their major residence, may be permissible below the legislation.
In a mortgage fraud case, “the government has got to prove that not only was your statement false, but you knew at the time that you made it, it was false, and you did it for the purpose of concealing and deceiving,” Delahunty mentioned. “Mistakes are not crimes. It has to be an intentional falsehood.”
In a assertion, Parella, the spokesperson, referred to as Chavez-DeRemer’s two mortgages a “non-story.”
“It’s common for families to refinance then buy a home with future plans in mind – trying to spin that as some type of scandal is pure nonsense. They followed the law and complied with all ethical obligations,” she mentioned.
In a assertion, White House spokesperson Taylor Rogers mentioned Trump’s Cabinet officers absolutely complied with the legislation.
“President Trump’s incredible Cabinet officials mentioned in this story, like all Administration officials, take their legal obligations seriously and fully comply with all legal and ethical obligations, unlike Lisa ‘Corrupt’ Cook who has been credibly accused of mortgage fraud,” Rogers mentioned.
Like Bessent and Chavez-DeRemer, whose explanations for why their mortgages had been authorized couldn’t be discovered by merely looking out on county databases, as Pulte appears to have performed, Cook might have hers, too.
The Trump administration has not filed a formal legal grievance in opposition to Cook – so, if it has arduous proof that she meant to commit mortgage fraud and must be fired from her position at the Fed, it stays out of public view.