Federal Reserve governor says Trump ally ‘cherry-picked’ details to make mortgage fraud claim

By Kara Scannell, CNN

(CNN) — Lawyers for Federal Reserve Governor Lisa Cook said allegations she committed mortgage fraud are “baseless” and urged the Justice Department to drop its inquiry.

The Justice Department indicated this summer it would review Cook’s mortgages after receiving a referral from Bill Pulte, the director of the Federal Housing Finance Agency, alleging she engaged in mortgage fraud by claiming multiple properties were primary residences. President Donald Trump used the allegations as a basis to try to fire Cook. She sued to keep her job and the Supreme Court is expected to decide the case next year.

In a letter sent Monday to Attorney General Pam Bondi and Ed Martin, special attorney for mortgage fraud, and obtained by CNN, Cook’s lawyer Abbe Lowell said the records indicate Cook’s applications were accurate.

“The full record makes clear that what he claims to be contradictions in loan applications were not contradictions at all but were cherry-picked, incomplete snippets of the full documents submitted at the time and in subsequent filings by Governor Cook consistent with her applications. The referrals are baseless and should not have been made in the first place,” Lowell wrote.

Pulte, who has made referrals to DOJ involving allegations of mortgage fraud against prominent Democrats, highlighted three properties Cook owns in Massachusetts, Georgia and Michigan. He alleged Cook improperly claimed they were primary residences in documents seeking mortgages, which her attorney denied.

In the 54-page letter, including dozens of pages of exhibits, Lowell wrote that Cook took out mortgages on homes as primary residences because that is where she lived at the time.

“Governor Cook had different principal residences over the years because her distinguished career had taken her to academic posts at Harvard University and Michigan State University, a postdoctoral fellowship at Stanford’s Hoover Institution, and a government post at the White House Council of Economic Advisers in Washington, D.C. This reflects why different mortgage applications accurately reported different properties as her primary residence at different periods of time,” Lowell wrote.

Lowell conceded “an inadvertent notation” in a document related to a condo she purchased in Atlanta in 2021 that said the condo is a primary residence. Lowell said another loan document in the application stated the condo is a “vacation home.”

“Because Governor Cook submitted that document to the lender as well, it would be impossible to conclude that she intended to defraud the lender by inadvertently listing the property as her ‘Primary Residence’ elsewhere,” Lowell wrote.

Lowell said Cook bought her first home in 2002 in Cambridge and it was her primary residence until she accepted an assistant professor position at Michigan State University and bought the property there in 2005. When Cook later refinanced the Cambridge home, Lowell said, she updated the paperwork to reflect it was no longer her primary residence.

Cook has lived on and off at the Ann Arbor, Michigan, home since 2005, Lowell said. When she refinanced the mortgage in 2021, he said, it was still her primary residence because she was still employed at the school.

Cook became a Federal Reserve governor in 2022. Lowell said she obtained permits to rent the property in Michigan until she returns when her term in Washington, DC, is up. He cites a city official as stating that living elsewhere on a temporary basis “does not necessarily make an owner ineligible for a principal residence exemption.”

“There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” Lowell wrote in the letter.

Lowell also represents New York Attorney General Letitia James in a criminal case on similar mortgage fraud claims initiated by Pulte.

DOJ declined to comment.

“The Department of Justice does not comment on current or prospective litigation including matters that may be an investigation,” a spokesperson said.

This story has been updated with a response from the Justice Department.

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