trump Accuses Fed’s Lisa Cook of Mortgage Fraud, But Proving Intent Is a High Bar
WASHINGTON - Former President Donald Trump has accused Federal Reserve Governor Lisa Cook of mortgage fraud, allegations that highlight the difficulty of prosecuting such cases even when discrepancies exist in property ownership records. The accusations centre on Cook’s designation of a property as her primary residence.
According to public records, cook listed a property in Ann Arbor, Michigan, as her primary residence while concurrently holding a mortgage on a separate property in Washington, D.C. This raised questions about whether she misrepresented her primary residence to secure a more favorable mortgage rate. Typically, a primary residence is defined as the place where an owner spends most of their time, votes, files tax returns, and receives mail, explained mortgage fraud expert Campo.
A 2023 report by the Federal Reserve Bank of Philadelphia identified over 22,000 instances of “fraudulent borrowers” misrepresenting owner-occupancy status between 2005 and 2017, based on a sample of over 15 million loans. The report found these borrowers tended to take out larger loans and had higher mortgage default rates. However, the authors noted that such fraud is often “difficult to detect until long after the mortgage has been originated.”
“There is a difference between the court of law and the court of public opinion,” said Jonathan edges,a law professor at Washington University in St. Louis and former Assistant Attorney General, in a recent CNBC interview. “In the court of law, this is small ball and very difficult to prove.” He elaborated that prosecutors would need to demonstrate not onyl an inaccurate form submission but also “the specific intent to deceive, to defraud banks, as opposed to just making a mistake.”
Federal sentencing data shows 38 mortgage fraud offenders were sentenced in fiscal year 2024, a slight increase from 34 in 2023, but considerably down from 426 in 2015. The U.S. Sentencing commission data does not categorize the specific types of mortgage fraud.
