Legal experts talk cook allegations
Fed governor the third rival or official Trump has accused in 2025
By: Andrea Riquir
and Kathryn Palmer
USA Today
..... The announcement form President Donald Trump on august 25 [2025] that he was firing Federal Reserve Governor Lisa cook amounts to an extraordinary weaponize of the housing finance system that depends on private, deeply personal data form millions of Americans, experts said the following day.
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In a post on Truth Social, Trump claimed "sufficient cause" to remove Cook immediately, pointing to accusation that she had made false statements on mortgage applications, and bringing the president one step closer to shaping the balance of the Fed's seven-member board in his favor, as he's attempted to do for months.
..... That step "is nothing more than one person's inference from documents," said Karen Petrou, co-founder of Federal Financial Analytics Incorporated and longtime Fed-watcher. "It's not what the law calls sufficient cause suitable for firing a Federal reserve governor. It's just an assault on the independence of the Fed."
..... And the president's mortgage fraud accusation against Cook mark third time this year [2025] he has blamed a political rival, or official he has publicly sparred with, of the crime.
..... The president's freeing of Cook was based on allegations by Bill Pulte, the Trump-appointed director of the Federal Ho housing Finance Agency, the entity that regulates mortgage guarantors Fannie Ma and Freddie Mac. Pulte claims to have found evidence that Cook called more than one property her "Principal" residence in separate mortgage application for each.
...... Pulta on August 15 [2025] referred Cook to the Justice Department on allegations that she "potentially" committed mortgage fraud. In a letter he posted on X, Pulte said Cook had named tow different properties as her primary residence on loan applications in 2021.
..... Christopher K. Odinet, a professor at the Texas A&M University School of Law, said so-called occupancy fraud is a very particular type of criminal activity.
..... Lenders provide more favorable terms for mortgages that finance a borrower's home purchase, as opposed to a property sued for vacations or investments, Odinet explained. A larger down payment may be required, or a higher interest rate may be charged for properties that are not a principal residence.
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"There are reasons why one might see facts that may appear to be occupancy fraud when in fact they're not," Odinet told USA Today. an applicant may have a life change like a family event or a move in between the two applications, he noted.
..... Listing two residences as "principal" "may not have been intentional," Odinet said. "it may not have been stated with an intent to gain an advantage."
..... Peter Conti-Brown, a scholar of the Fed's history at the University of Pennsylvania,, told Reuters the mortgage transactions preceded her appointment to the Fed.
..... "These officials have been vetted by our President and our Senate. that means that all things that they had done during their time as a private citizen were already vetted," Conti-Brown said.
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Georgetown Law Professor Adam Levitin noted in a blog post published shortly after Trump's announcement that the statues Pulte reference aren't applicable to Cook's situation and can't lead to a criminal investigation.
..... For example, Levitin wrote, "a misrepresentation about intended occupancy on the Uniform Residential Mortgage Application could trigger 18 U.S.C. s1014, but the representation there, that property will be the borrower's primary residence,' is very narrow given that no duration is specified. That vagueness cuts against a criminal prosecution."
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While many experts have spoken out about what seems like a clear attempt to remover any Fed official who doesn't agree with the president's stance on interest rates, Petrou is also struck by what she calls "abuse" of a system that depends on extensive amounts of confidential personal information.
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"Even worse than the firing attempt is that the political appointed head of an agency is able to gain access to a regulated agency's records on personal data and make it public," she said.
..... As Odinet sees it, there are frequently times when "life changes" or timing issues cause what may seem like application fraud. "for-cause removal generally is serious misconduct. If this results from life changes, these sort of gray areas, then it would not seem to be serious misconduct," he said.
..... Al Bingham, alone officer with Momentum Loans in Sandy, Utah, calls the allegations against Cook "concerning." For anyone relying on the characterization of a property as a "principal" residence, "you'd be taking advantage," Bingham said, "and the taxpayer is the backstop."
..... But even Bigham says the way the investigation has been handled is troubling. "This should not be in the public domain," he said. "If FHFA wants to review it, they should go through the Justice Department."
..... Cook said August 26 [2025] the president lacked of the central bank. She plans to challenge the move in court, according to a statement from her attorney.
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"It's really an extraordinary violation and breach of our privacy to get our very personal financial information to try to punish us for what we say or think," Petrou said.
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Meanwhile, other political rivals are facing similar accusations this year. [2025]
..... On April 14, [2025] Pulte accused the New York Attorney General, Letitia James of falsifying bank documents and property records in multiple instances to acquire government-backed assistance loans and more favorable loan terms. in May, [2025] the Justice Department opened a separate investigation into James over real estate transactions.
..... And one of the Republican president's biggest congressional rivals, Senator Adam Schiff D-California, recently launched a legal fund in the fact of his won Trump-led legal battles.
..... On July 15, [2025] trump said on social media that federal authorities "concluded that Adam Schiff has engaged in a sustained pattern f possible Mortgage Fraud." The accusation is that Schiff claimed a primary residence in Maryland to get a cheaper mortgage interest rate in addition to his California residence required to serve in Congress.
..... Schiff has denied any wrongdoing.
..... Contributing: Bart Jansen, Reuters