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The administration of President Donald Trump has taken a sharp new turn in its long-running feud with New York Attorney General Letitia James, now accusing her of mortgage fraud and asking federal prosecutors to investigate.
According to officials within the Federal Housing Finance Agency (FHFA), James is suspected of falsifying information on mortgage documents to secure better loan deals on two properties—one in Norfolk, Virginia, and another in Brooklyn, New York. The administration has formally referred the matter to the U.S. Department of Justice for criminal review.
At the heart of the allegations is the claim that James misrepresented the Virginia home as her primary residence in 2023. Critics say this raises eyebrows, given that her elected position in New York requires her to live in-state. In a separate case involving the Brooklyn property, James allegedly listed the building as a four-unit dwelling, although public records reportedly identify it as having five units—potentially affecting her eligibility for certain types of mortgages.
Additionally, paperwork from a past real estate transaction reportedly listed James and her father as “husband and wife,” further fueling accusations that official documents may have been altered or misrepresented.
So far, no charges have been filed against James. However, the move by Trump’s team has sparked immediate backlash from her office, which views the referral as a blatant act of political retaliation.
“Attorney General James remains focused on her work serving the people of New York,” a spokesperson said in a statement. “This is a clear attempt to weaponize federal agencies for political revenge. She will not be intimidated.”
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The referral follows a major legal setback for Trump last year when James successfully prosecuted him in a civil fraud case. That lawsuit accused Trump of exaggerating the value of his real estate holdings to secure favorable loans and resulted in a court ordering him to pay $454 million in penalties. Trump is currently appealing the ruling.
The former president has since used public platforms to denounce James, calling her “corrupt” and demanding her resignation.
Legal analysts caution that while the allegations against James are serious, the political context cannot be ignored.
“There may be grounds for a mortgage fraud investigation,” said former federal prosecutor Neama Rahmani, “but any move to prosecute a sitting attorney general—especially one who’s been involved in high-profile litigation against the person making the referral—will be highly scrutinized.”
The Justice Department has not yet commented on whether it plans to open a formal investigation. As political and legal tensions escalate, this latest chapter adds a new layer of complexity to an already heated standoff between two powerful figures.
