As fans of Sex and the City know, the more charming neighborhoods of New York City are lined with 19th century brownstones that were once single-family mansions and later subdivided in apartments. Letitia James bought one of them in in Brooklyn in 2001. Because they are narrow, these brownstones can generally accommodate only one kitchen and bathroom per floor; which is why, for purposes of New York City and lenders like Fannie Mae, there is rarely more than one residential unit per floor in a brownstone. Also, the number of housing units in a single brownstone is subject to change. Lots of small apartments in New York are combined into a single unit. Lots of wealthy people convert a multifamily unit into a single family house. Which is one reason why the criminal referral for mortgage fraud allegedly committed by Ms. James is is especially dodgy.
The Federal Housing Finance Agency—the regulator of Fannie Mae and Freddie Mac, which finance most of the fixed rate mortgages In the US—said that Ms. James falsified the mortgage documents by claiming that she was buying a four-family residence instead of a five-family residence. Residences with one to four units generally get better terms than larger multifamily buildings with five or more units.
As the New York City certificate of occupancy states, Attorney General James' brownstone had one unit per floor, except in 2001 the third floor could have accommodated two families. We don't know if that were true after she moved in.
That’s the big criminal offense supposedly committed by Attorney General James.
But her accusers didn’t stop there. They pointed out that 42 years ago in1983 another mortgage document referred to Ms. James' father as her husband, which could have been a mistake that she overlooked. Another document, confirming that the 1983 mortgage have been fully paid off, duplicated that same mistake. There’s zero evidence that Ms. James ever saw those documents.
Then there’s the craziest accusation of all, that Ms. James bought another house in Norfolk, Virginia in 2023 and represented that the dwelling was her primary residence, even though her place of work and employer were located at hundreds of miles away. Given the epidemic of occupancy fraud that was uncovered in the aftermath of the 2008 financial crisis, it’s impossible to believe that Fannie Mae‘s computer systems, and the mortgage originator never picked up on that obvious disconnect.
FHFA offers zero evidence that Ms. James ever made such a obviously false claim, because James never signed off on anything. Rather, they point to a Virginia Deed of Trust signed by someone else, who acted under power of attorney on Ms. James behalf. The standard form states:
6. Occupancy. Borrower must occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and must continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent will not be unreasonably withheld, or unless extenuating circumstances exist that are beyond Borrower’s control.
It's safe to assume that if there were any loan application or other document showing that James actually represented the Virginia property as her primary residence, FHFA would have disclosed it. Whereas James’ office offered documents disproving FHFA’s claim, as The New York Times reported:
[O]n a separate loan application form provided by the attorney general’s office, Ms. James indicated that she did not intend to occupy the property as a primary residence. Her mortgage agreement did not require her to do so.
At the very worst, the person acting on Ms. James behalf, not Ms. James, did something wrong.
Anyone who spent 10 minutes on the Internet would quickly uncover the substance-free criminal referral was a bogus pretext to create fake news narrative against an enemy of Trump, to create false equivalency—immaterial flaws in James’ documentation about piddling amounts versus Trump's decade-long falsifications of real estate values totaling hundreds of millions—which would be lapped up by the New York Post and on Fox and Newsmax.
