From a friend in the mortgage business:
"Another Government Official Referred for Mortgage Fraud
This week Bill Pulte, the head of the FHFA, which oversees Fannie Mae and Freddie Mac, referred another government official to the Dept. of Justice for possible mortgage fraud. The culprit this time is a sitting member of the Federal Reserve Boad of Governors. The seven members of this board are the people that vote to raise or lower interest rates.
Lisa Cook was a contentious nomination to the board by President Biden. She was ultimately confirmed by a fractured senate in 2022. Critics believed her to be too partisan politically for the job. She’s an academic economist by trade. Cook was previously a professor of economics and international relations at Michigan State University
If the allegations are true, the acts committed are pretty damning. It is alleged that within a 14-day period in 2021 Cook applied for and received mortgages on two separate properties – claiming both as owner-occupant primary residences. Ouch. According to Pulte, in 2021 Cook designated both a condominium in Atlanta and a home in Ann Arbor, Mich., as her primary residence when taking out loans. In the referral, Cook obtained a loan on the Michigan home on June 18, 2021, and certified that she would use it as her “principal residence” within 60 days and for a full year. Two weeks later, Ms. Cook purchased the Atlanta condo and affirmed that the property would be her principal residence.
Here's a perspective you won't find in any other article – because none of the reporters work in the mortgage industry:
If Cook was in contract to buy the Atlanta condo while applying for the loan on the Michigan property, she had to disclose to the Michigan lender she had additional debt coming. No lender I know would allow you to close on loan #1 without providing documentation from the lender of the terms of loan #2. And for the Atlanta loan #2, that lender would also need to see all the documentation of loan #1. If Cook didn’t disclose the other mortgage application to each financial institution, that is another fraudulent offense. What’s troubling for me is that it seems rather odd that neither financial institution did their due diligence in reviewing Cook’s application for credit. It seems like she was given special treatment.
None of you could ever get away with what Cook is alleged to have done. Lenders can check a database to see if you have pending applications with other lenders. If other pending transactions are discovered, you will be required to provide documentation for that transaction. That’s the only way a lender can accurately assess your debt-to-income ratio.
Pulte released a statement saying FHFA was tipped off to the possible fraud which triggered the investigation. Pulte went on to say that the documents they uncovered showed Cook signed the paperwork for both properties herself. These statements make for a much stronger case that other recent cases referred to the DOJ.
As of Friday, President Trump issued a statement of his intention to fire Cook if she didn’t resign on her own. So far none of the other high-profile cases of mortgage fraud referred to the DOJ regarding US Senator Adam Schiff and New York Attorney General Letitia James have resulted in charges. We’ll just have to wait and see what happens with Fed Governor Lisa Cook.
Regardless of one’s stature in life, those in power should never be allowed to get away with acts we’d be fined and thrown in jail for. The penalties for mortgage fraud are severe and can include prison sentences of up to 30 years, and fines of up to $1,000,000." |
