Lawyer slams 'baseless' claims as political firestorm continues
Federal Reserve governor Lisa Cook’s mortgage applications have come under sharp scrutiny, with her legal team mounting a detailed defense against fraud allegations that have fueled an unprecedented attempt by President Donald Trump to remove her from the central bank’s board.
In a letter to Attorney General Pam Bondi, Cook’s attorney, Abbe Lowell, argued that “apparent discrepancies in loan documents were either accurate at the time or an ‘inadvertent notation’ that couldn’t constitute fraud given other disclosures to her lenders.”
Lowell emphasized, “There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud.”
The allegations, referred to the Justice Department by Federal Housing Finance Agency (FHFA) director Bill Pulte, center on Cook’s declarations of “primary residence” on multiple properties in Michigan, Georgia, and Massachusetts.
Pulte, a Trump appointee, asserted on social media, “Mortgage fraud is a serious crime and must be prosecuted as such.”
Cook’s legal team countered that her mortgage filings reflected her career moves, stating, “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.”
Lowell flagged what he described as “an inadvertent notation” in a 2021 Atlanta condo application, clarifying that the property was also described as a “vacation home” in other documents.
“It would be impossible to conclude that she intended to defraud the lender by inadvertently listing the property as her ‘Primary Residence’ elsewhere,” Lowell said.
Broader questions have emerged about the politicization of mortgage fraud referrals.
Lowell accused Pulte of “cherry-picking” cases against Democrats while ignoring similar issues among Republicans.
“One would expect that he would have made referrals to you based on the same types of documents about others,” Lowell wrote.
Cook, the first Black woman to serve on the Fed’s board, has denied any wrongdoing and is challenging her removal in court. The Supreme Court has temporarily blocked her ouster and will hear arguments in January. The Justice Department and FHFA have not commented publicly.
The case highlights the complexity of mortgage documentation for professionals with multi-state careers, and the risks of politicizing regulatory enforcement.
As legal proceedings continue, the outcome could set a precedent for the independence of central bank officials and the standards for mortgage application disclosures.
Some critics warn that letting the president fire Fed governors could weaken the central bank’s independence.
“When you talk about the Fed independence, that's really what the Supreme Court will be deciding,” Kenneth Katkin, a law professor at Northern Kentucky University, told Mortgage Professional America.
“Whether we still have the principle of Fed independence or not. I think as long as the lower courts are deciding it, the laws that exist are crafted the way they are to preserve Fed independence.”
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