Democrats have a mortgage fraud problem, and feds are on the case

The Trump administration and the law enforcement community under his watch appear to have found opponents’ legal weak spot: an emerging pattern of mortgage fraud that seems common in the political sphere. The increase in instances, moreover, appears to have turned the tables on a number of prominent Democrats who — in the name of equal justice and saving democracy — pursued legal actions against President Donald Trump while he was out of office.

Sen. Adam Schiff, D-Calif., on Tuesday became the latest and most prominent of Trump’s adversaries to face allegations of wrongdoing, following a finding from Fannie Mae’s financial crimes division that he engaged in an apparent pattern of mortgage fraud. Similar allegations arose against New York Attorney General Letitia James earlier this year. Both were prominent proponents of legal cases against the former president.

The charges, however, may face some complications in light of legal developments in a related case last week. The Biden administration raised the same issue against former Baltimore State's Attorney Marilyn Mosby, though the U.S. Court of Appeals for the 4th Circuit overturned her conviction on Friday. 

Nevertheless, the mortgage fraud issue appears to be an increasingly prominent legal Achilles heel for politicians, one of which the Justice Department may prove eager to aim at.

Trump, for his part, expressed the belief that the cases appeared to be “open and shut” but insisted the decision to bring charges lay with the DOJ.

“Well, I just saw it and I think the thing with Adam Schiff is very serious, and I think that what they have on Letitia James is very serious,” Trump told Real America’s Voice White House correspondent Brian Glenn at a press gathering. "But I have to leave that up to the district attorneys and to the prosecutors and to the attorney general, most importantly,” he said.

“I was a little surprised. I thought he would have covered his bases a little bit better than that,” Trump added, referencing Schiff.

Adam Schiff

The California senator rose to prominence as an impeachment manager for the House in 2019 as part of Trump’s first impeachment trial over his alleged attempt to extort Ukrainian President Volodymyr Zelensky into releasing material on the Biden family.

Though Trump was acquitted, Schiff moved on to greater fame within the Democratic ranks and increased media attention, and managed to claim a Senate seat in 2024, following the death of Sen. Dianne Feinstein, D-Calif. 

Trump quipped that Schiff deserved “justice” following a finding from Fannie Mae’s financial crimes division that Schiff engaged in a pattern of possible fraud.

"I have always suspected Shifty Adam Schiff was a scam artist. And now I learn that Fannie Mae’s Financial Crimes Division have concluded that Adam Schiff has engaged in a sustained pattern of possible Mortgage Fraud," Trump posted on Truth Social on Tuesday.

"Adam Schiff said that his primary residence was in MARYLAND to get a cheaper mortgage and rip off America, when he must LIVE in CALIFORNIA because he was a Congressman from CALIFORNIA," he added. "I always knew Adam Schiff was a Crook. The FRAUD began with the refinance of his Maryland property on February 6, 2009, and continued through multiple transactions until the Maryland property was correctly designated as a second home on October 13, 2020. Mortgage Fraud is very serious, and CROOKED Adam Schiff (now a Senator) needs to be brought to justice."

So far, however, the DOJ has not disclosed whether it has initiated any proceedings against Schiff, and it remains unclear whether charges will be forthcoming.

Schiff, for his part, deemed Trump’s comments a “letdown” due to his previous calls to arrest him on more severe charges.

“Since I led his first impeachment, Trump has repeatedly called for me to be arrested for treason,” he said. “So in a way, I guess this is a bit of a letdown. And this baseless attempt at political retribution won’t stop me from holding him accountable. Not by a long shot.”

Letitia James

The New York State Attorney General pursued a civil fraud case against Trump last year, alleging that he manipulated the value of his assets to secure favorable loan terms and lower insurance premiums. The non-jury trial saw Judge Arthur Engoron issue a finding that Trump did engage in fraud. He further levied a fine of more than $450 million. Trump's lawyers filed an appeal, which is ongoing. The case was brought by James in her capacity as the state's top legal watchdog, and not by the lenders with which Trump was doing business.

In April of this year, James herself became the subject of a referral to the Department of Justice over alleged mortgage fraud. U.S. Federal Housing Finance Agency (FHFA) Director William Pulte issued the referral.

"Based on media reports, Ms. Letitia James has, in multiple instances, falsified bank documents and property records to acquire government-backed assistance and loans and more favorable loan terms," he wrote to Attorney General Pam Bondi. 

"This has potentially included 1) falsifying residence status for a Norfolk, Virginia-based home in order to secure a lower mortgage rate and 2) misrepresenting property descriptions to meet stringent requirements for government-backed loans and government assistance."

FBI Director Kash Patel confirmed in May that James was the subject of an active investigation, telling CNN that “this case, I can tell you, is being handled by our professional pros who are subject-matter experts, reporting directly to headquarters, which reports to (Deputy Director Dan Bongino) and I.”

Marilyn Mosby

The Trump administration hasn’t been the only one to explore mortgage fraud against political figures. Under the Biden administration, former Baltimore state attorney Marilyn Mosby was convicted on counts of perjury and mortgage fraud, though she avoided jail time and received 12 months home confinement.

Notably, Mosby’s mortgage fraud conviction was overturned on Friday by the federal 4th Circuit Court of Appeals. That panel wrote that "the district court gave the jury an erroneous venue instruction and because the weight of the evidence did not support the jury's finding,” CBS News reported. 

Mosby was convicted in 2022 in connection with a mortgage application for a condo in Florida. The court upheld her perjury convictions and she is facing disbarment proceedings. The Maryland Supreme Court ruled in 2023 after her conviction that she could keep practicing law while her case was on appeal, but now that her perjury convictions have been upheld, her law license may be in jeopardy.