PrintDecember 8, 2025
Mortgage Loan Fraud Explained
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Disclaimer: From 2004 until 2009, I worked in the mortgage loan industry. Drawing upon my knowledge and experience in the Risk Management department and as an ancillary employee working closely with mortgage fraud investigator team, the following essay details why mortgage loan fraud is a prosecutable crime.
Letitia James, Adam Schiff, Ruben Gallego, Eric Swalwell, and Lisa Cook have two things in common -- they are all Democrats and they all have been accused of mortgage loan fraud.
It is a crime to provide false information on a home loan application and is punishable by law, to include a possible prison sentence, paying a fine, or making restitution to the mortgage lender.
Remarkably, mortgage loan fraud is an easy crime to prove, because there is a documented paper trail and in most cases of mortgage loan fraud, the applicant knowingly made false statements on the mortgage loan application, either to qualify for a preferred home loan or to obtain a lower interest rate. It is not an ambiguous crime.
Back in the day, someone wanting to purchase a home applied for a home loan at either a lending bank or private mortgage loan company. The loan applicant (with the assistance) of the loan officer, completed a paper application, usually during a face-to-face meeting.
The applicant was required to provide supporting documentation to successfully qualify for a home loan.
As everyone who has applied for a mortgage knows, there is a plethora of paperwork involved to include proof of steady employment, two recent years of IRS returns, proof of annual salary, credit history, bank statements; including investment statements, and a complete list of additional real estate owned; especially for encumbered real estate having outstanding mortgage loans.
As part of the process, the applicant is required to sign the application attesting to the fact all the information provided is correct and true. The attestation statement clearly and plainly includes language which details the penalties for fraud or misrepresentation.
Home buyers now have the option to complete the mortgage loan application at a lender website, using a computer. What has not changed is the requirement for supporting documentation to begin the loan qualification process and proceed with loan processing. The loan applicant is still required to sign the loan application, attesting to the veracity of the information provided.
The language about penalties for providing false or misleading information has not changed, either.
Mortgage loan fraud encompasses making false statements; such as marriage status, employment status, falsifying annual income, failure to disclose assets and/or liabilities, misrepresenting occupancy intent to live in the property, omission of additional household income such as alimony, identity theft, or using a straw buyer to qualify for the mortgage loan.
Leticia James, the Attorney General of New York, was accused of falsifying her marriage status on a mortgage loan application. She indicated she was married to an individual, who turned out to be her father. She also indicated on a loan application that a multi-unit property, which she intended to purchase in New York City, was four units, when in fact — the building consisted of five separate units.
Ms. James also falsified the occupancy status on another home loan application. She indicated on the Norfolk, Virginia home loan application that this home would serve as a second home for herself.
As such, Ms. James qualified for a lower loan interest rates not only on the Norfolk home loan, but the other mortgage loans, as well. In truth, the Norfolk home in Virigina is a rental property occupied by her niece.
In April of 2025, Bill Pulte; head of the of the Federal Housing Finance Agency, referred Ms. James to the Department of Justice for possible criminal prosecution.
Ms. James immediately accused President Trump of retaliation, based on her relentless prosecution of the president between his terms in the Oval Office.
Her attorney claims she made innocent clerical errors on the loan applications, no less than three times!
Presented with the evidence of financial fraud, Ms. James was indicted by a grand jury on Oct. 9th of this year; however, the charges against Ms. James was dropped due to a legal technicality and the grand jury refused to re-indict her on Dec. 5th.
Simply put, Ms. James will not be tried, nor prosecuted for mortgage loan fraud.
Clearly, the law does not apply to some people in the same manner as it is applied to other people; people who have neither the name recognition, an elite job title, nor elected political status, which absolves them of fraud and falsifying financial documents.
U.S. Sens. Ruben Gallego (D-AZ) and Adam Schiff (D-CA), as well as Rep. Eric Swalwell (D-CA) and Federal Reserve Board of Governor Lisa Cook have also been accused of misrepresenting their occupancy status (primary residence vs. secondary home vs. vacation home) on numerous mortgage home loans for multiple properties.
In each case, their statements of primary residence is falsified on the mortgage loan applications for the purpose of lower mortgage loan rates.
Ms. Cook stated that her primary residence includes two homes; one located in Michigan and the other located in Georgia. She claimed the third home in Massachusetts as a secondary residence.
Like the case against Letitia James, Pulte also referred Cook to the DOJ for the alleged crime of providing false information regarding occupancy on August 15th.
To date, Ms. Cook remains in her position at the Federal Reserve and despite a dicey interpretation of what constitutes her claim of a primary residence, no further legal action has been taken regarding her false statements on her mortgage loan applications. She, too, has been absolved of any wrongdoing.
Gallego, Schiff, and Swalwell purchased homes in the D.C. area, each of them having falsified their occupancy status on the loan applications to benefit from lower loan interest rates.
Schiff and Swalwell are under DOJ investigation and both claim they are victims of retaliation and intimidation on the part of the Trump administration.
Both men own homes which are encumbered by home loans in their home state of California, but obtained mortgage loans in the D.C. area at lower loan rates by claiming their D.C. homes are also their primary residence.
Although Gallego is not currently under a DOJ investigation, there is sufficient proof showing he not only owns a home in the Phoenix area, (which he claims as his primary residence,) he also owns another home in the D.C. area, which he also claims is his primary residence, as evidenced by the mortgage loan documents for both homes and which are available for review in the public domain.
Hope fades that Letitia James, Lisa Cook, Adam Schiff, Eric Swalwell, and Ruben Gallego will be tried, much less found guilty of mortgage fraud in a court of law.
Most likely, the remaining investigations will be dropped and the cases dismissed. The two-tiered justice system protects the powerful, who knowingly exploit the system for personal gain and there are probably plenty of other politically powerful people in D.C. who have also knowingly done the same.
Image: Pixabay / Pixabay License
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