In letter to Bondi, Fed’s Lisa Cook says mortgage fraud allegations against her are ‘baseless’

WASHINGTON (AP) — In a letter to Attorney General Pam Bondi on Monday, lawyers for Federal Reserve Gov. Lisa Cook disputed a Trump administration official’s claims that she committed mortgage fraud.

President Donald Trump used the accusation as a basis for seeking her dismissal, marking the first time a president has sought to fire a Federal Reserve governor in the central bank’s 112-year history.

The letter is Cook’s first response to an August criminal referral by Bill Bolt, director of the Federal Housing Finance Agency. Bolte has brought several other mortgage fraud charges, including against top Democrats such as New York Attorney General Letitia James, Sen. Adam Schiff of California, and California Rep. Eric Swalwell.

The impeachment attempt occurred as Trump repeatedly attacked the Fed for not cutting its key interest rate fast enough. If Cook is eventually removed from her post, it would give the president the opportunity to appoint a fourth member to the seven-member Federal Reserve Board, ensuring a majority.

Cook filed a lawsuit to keep her job, and the Supreme Court ruled last month that she could remain in her position while fighting the administration in court. The Supreme Court said it would hear arguments in the case in January.

Read more: Federal Reserve Governor Lisa Cook is suing the Trump administration to block her attempt to fire her

In a letter Monday, Cook’s attorney, Abby Lowell, wrote that the case against her relies largely on “one stray reference” in the 2021 mortgage document that was “obviously innocuous in light of the many truthful and more specific disclosures” about the homes she purchased.

“There is no fraud, no intent to deceive, and absolutely nothing criminal or basis for a claim of mortgage fraud,” the letter said.

Cook is the first Black woman to serve on the Fed’s board, and was appointed in 2022 by President Joe Biden.

The Department of Justice and FHFA did not immediately respond to emails seeking comment.

In August, Bolte accused Cook of committing mortgage fraud by advertising two different homes — one in Ann Arbor, Michigan, and one in Atlanta — as her “principal residence.” Such declarations can result in lower mortgage rates or smaller down payment requirements than if the property was declared as a second or vacation home.

“Don’t advertise two principal residences in President Trump’s America,” Bolte said on August 20 on social media platform X. “Mortgage fraud is a serious crime and should be prosecuted as such.”

However, Lowell said Monday that Bolte pursued mortgage fraud on a partisan basis, focusing on Democrats and declining to pursue similar allegations against Republicans.

Bolte made a criminal referral to the Department of Justice in August, followed by a second referral regarding a third property in Cambridge, Massachusetts. Bolt alleged that Cook also classified that property as a primary residence, even though she rented it.

Lowell said Cook has lived most of the time at the Ann Arbor property since she first purchased it in 2005. As a result, it was accurate for her to refer to it as her “primary residence” in a June 2021 application to refinance the mortgage, the letter said.

A month later, she purchased a condo in Atlanta, which in a July 2021 document she also referred to as her “primary residence.” Lowell said it was an “isolated posting” that did not reflect fraudulent intent. A previous mortgage application to the same lender in May 2021 had referred to the Atlanta apartment as a “vacation home,” Lowell said. Cook also referred to it as a second home in federal filings during her confirmation process to become 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 said.

Lowell wrote that there had been no similar fraud at the Cambridge House, which she acquired while working as an economist at Harvard University.

Cook had worked at the school for about five years when she bought the house in 2002 and took out a mortgage that made it her primary residence. It remained her primary residence until she was hired as a tenured academic at MSU and moved, Lowell said. She refinanced the Cambridge property in 2021 and repurposed it as a second home, according to mortgage documents provided by Lowell.

In connection with financial filings with the government in connection with her nomination to the Fed, Cook also disclosed the house as a rental property and a second home, the letter said.

“Once again, Director Bolte presents no evidence to suggest that Governor Cook had the ‘required specific intent to defraud’ with respect to the Cambridge properties,” Lowell wrote. “Conversely, when Governor Cook refinanced the Cambridge property, she updated the mortgage to reflect that it was no longer her primary residence.”

Bolte has shown little desire to investigate similar allegations of mortgage misconduct by members of the Trump administration, the president’s allies and even Bolte’s father, which Cook’s attorney noted.

“One would expect that he would have referred you based on the same types of documents as the others,” Lowell wrote.

Although the White House has repeatedly defended Bolte, over the past month it has also found itself the subject of unwanted scrutiny – and angered other members of the administration. Earlier this month, he sold Trump on the appeal of a 50-year mortgage as a way to increase home buying and construction – a proposal that has been widely criticized because it would dramatically increase the overall price of the loan.

Bolte, the self-appointed head of Fannie Mae and Freddie Mac, has also shaken up the housing industry by purging ethics officers and senior leaders at the two giant government-sponsored lending companies, which have trillions of dollars in assets.

Other top Fannie Mae executives were forced to resign last month after they expressed concern that a Pulte confidant had shared confidential pricing data with Freddie Mac, a major competitor.

The company’s data sharing exposed allegations that it was colluding with a competitor to fix mortgage rates, the AP reported last week.