WASHINGTON (AP) — In a letter to Attorney General Pam Biondi on Monday, legal professionals for Federal Reserve Governor Lisa Cook disputed allegations by a Trump administration official that she dedicated mortgage fraud.
President Donald Trump used the accusation as a foundation to hunt her firing, the primary time a president has sought to take away a Fed governor within the central financial institution’s 112-year historical past.
The letter is the primary response by Cook to a prison referral in August by Bill Pulte, director of the Federal Housing Finance Agency. Pulte has made a number of different mortgage fraud accusations, together with in opposition to main Democrats resembling New York Attorney General Letitia James, Sen. Adam Schiff of California, and California Rep. Eric Swalwell.
The tried firing occurred as Trump has repeatedly attacked the Fed for not chopping its key rate of interest shortly sufficient. If Cook is in the end faraway from her place, it could give the president the chance to nominate a fourth member to the Fed’s seven-member board, securing a majority.
Cook sued to maintain her job, and the Supreme Court dominated final month that she may stay within the place whereas she fights the administration in court docket. The Supreme Court has stated it could hear arguments within the case in January.
In the letter Monday, Cook’s lawyer, Abbe Lowell, wrote that the case in opposition to her largely rests on “one stray reference” in a 2021 mortgage doc that was “plainly innocuous in light of the several other truthful and more specific disclosures” in regards to the houses she has bought.
“There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” the letter stated.
Cook is the primary Black girl to serve on the Fed’s governing board, and was appointed in 2022 by President Joe Biden.
A Justice Department spokeswoman stated the division “does not comment on current or prospective litigation including matters that may be under investigation.” The FHFA didn’t reply to a request for remark.
In August, Pulte accused Cook of committing mortgage fraud by declaring two totally different houses — one in Ann Arbor, Michigan, the opposite in Atlanta — as her “primary residence.” Such declarations may end up in decrease mortgage charges or a smaller down fee requirement than if a property is asserted to be a second or trip house.
“Do not declare two principal residences in President Trump’s America,” Pulte stated Aug. 20 on social media platform X. “Mortgage fraud is a serious crime and must be prosecuted as such.”
Yet Lowell stated Monday that Pulte has pursued mortgage fraud on a partisan foundation, specializing in Democrats and refusing to pursue related allegations in opposition to Republicans.
Pulte made a prison referral to the Justice Department in August, and adopted up with a second referral on a 3rd property in Cambridge, Massachusetts. Pulte alleged that Cook additionally categorized that property as a main residence, although she rented it out.
Lowell argued that Cook has principally lived within the Ann Arbor property since first buying it in 2005. As a outcome, it was correct for her to consult with it as her “primary residence” in a June 2021 utility to refinance its mortgage, the letter stated.
A month later she bought a condominium in Atlanta, and in a July 2021 doc additionally referred to it as her “primary residence.” Lowell stated that it was an “isolated notation” that didn’t replicate an intent to defraud. An earlier mortgage utility to the identical lender in May 2021 had referred to the Atlanta rental as a “vacation home,” Lowell stated. Cook additionally referred to it as a second house in federal filings throughout her affirmation course of to grow to be a Fed governor.
“It would be impossible to conclude that she intended to defraud the lender by inadvertently listing the property as her ‘Primary Residence,’” the letter stated.
Lowell wrote that there was equally no fraud concerned within the Cambridge house, which she obtained whereas working as an economist for Harvard University.
Cook labored for the college for roughly 5 years when she purchased the house in 2002 and obtained a mortgage that listed it as her main residence. It remained her main residence till she was employed as a tenure-track educational by Michigan State University and moved, Lowell stated. She refinanced the Cambridge property in 2021 and redesignated it as a second-home, in accordance with mortgage paperwork offered by Lowell.
On monetary filings submitted to the federal government in connection together with her nomination to the Fed, Cook additionally disclosed the house as a rental property and second house, the letter stated.
“Once again, Director Pulte offers no evidence indicating that Governor Cook had the ‘required specific intent to defraud’ in relation to the Cambridge property,” Lowell wrote. “On the contrary, when Governor Cook refinanced the Cambridge property, she updated the mortgage to reflect that it was no longer her primary residence.”
Pulte has proven little urge for food to analyze related allegations of mortgage misconduct by members of Trump’s administration, allies of the president and even Pulte’s personal father, which Cook’s lawyer famous.
“One would expect that he would have made referrals to you based on the same types of documents about others,” Lowell wrote.
Though the White House has repeatedly defended Pulte, over the previous month he additionally discovered himself the topic of undesirable scrutiny – and has angered different members of the administration. Earlier this month, he persuaded Trump in regards to the attract of a 50-year mortgage as a approach to improve house shopping for and constructing — a proposal that was extensively criticized as a result of it could drastically improve the general value of a mortgage.
Pulte, who appointed himself chairman of Fannie Mae and Freddie Mac, has additionally rattled the housing business by purging ethics officers and prime leaders of the 2 government-sponsored mortgage giants, which maintain trillions of {dollars} in belongings.
Other prime executives at Fannie Mae have been compelled out final month after they voiced alarm {that a} Pulte confidant had shared confidential pricing information with Freddie Mac, a prime competitor.
The information sharing uncovered the corporate to claims that it was colluding with a rival to repair mortgage charges, the AP reported final week.
Separately on Monday, Lowell, who additionally represents Letitia James, the New York lawyer common charged by the Justice Department in a mortgage fraud investigation, requested a choose to dismiss a case that had additionally been pushed by Pulte.
Lowell cited what he stated was “outrageous” conduct by Pulte and different officers and stated that since his appointment to steer the FHFA, he had reworked the “little-known agency into a weapon to be brandished against President Trump’s political enemies.”
Pulte sought to press the investigation ahead, the protection submitting states, at the same time as inside Fannie Mae investigators didn’t discover clear and convincing proof of fraud.
Associated Press Writer Eric Tucker contributed to this report.
https://www.huffpost.com/entry/lisa-cook-federal-reserve-mortgage-fraud-baseless_n_691ba94de4b0414d84d6ea2c