Federal Reserve Governor Lisa Cook is facing allegations of mortgage fraud leveled by a Trump administration official and is vowing to fight back legally against President Donald Trump’s effort to remove her.
Last week, Federal Housing Finance Agency Director Bill Pulte submitted a criminal referral to the Justice Department accusing Cook of improperly claiming residence status while obtaining mortgages for two homes in Ann Arbor, Michigan, and Atlanta, Georgia. Cook hasn’t been charged with a crime, and it’s unclear whether a DOJ investigation will result in charges being filed.
“We see mortgage fraud throughout the United States, it happens all the time, it’s prosecuted all the time,” Pulte said in an interview on FOX Business Network’s “Making Money With Charles Payne” on Friday.
“In Ms. Cook’s case, it appears from what we can tell, to be blatant mortgage fraud. She claimed to be living in the state of Michigan, she took out a loan. And then she went and took out another loan in Atlanta and said that both of them were her primary residence. That’s a big no-no,” Pulte said.
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“You can’t do that in our mortgage market. You have to be able to declare that it’s a second home or investment property. You have to fill out these applications correctly,” he explained.
Lenders will typically offer more favorable terms when a property is designated as a primary residence, such as lower interest rates, smaller down payments, higher loan-to-value ratios when borrowing against the property, and more lenient lending standards such as higher debt-to-income ratios.
Mortgage fraud can be prosecuted under federal and state laws, with penalties including prison sentences and large fines. Civil penalties can include the lender calling in the loan due immediately, raising foreclosure risk, and the borrower could be banned from obtaining future loans.
The referral comes amid the Trump administration’s efforts to pressure the Federal Reserve into cutting interest rates, which the president and his allies want to occur in the hope it will boost the economy and lower the cost of servicing the national debt.
The president moved to fire Cook on Monday, though it’s unclear whether he has the legal authority to do so as this is the first time a U.S. president has attempted to remove a Fed governor. Under the laws enacted by Congress that govern the central bank, Fed governors may only be removed “for cause” which is generally understood to apply to malfeasance or misconduct.
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Cook has indicated that she intends to file a lawsuit to block Trump’s attempt to fire her, which could leave the courts in the position of determining whether Pulte’s referral is sufficient to remove Cook in the absence of actual criminal charges or a conviction.
A Federal Reserve spokesperson said in a statement on Tuesday that the central bank “will continue to carry out its duties as established by law,” and it will abide by any court ruling on Cook’s case.
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In a statement released Tuesday, Cook said that, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Following Pulte’s referral last week, Cook said that she has “no intention of being bullied to step down from my position because of some questions raised in a tweet,” adding that she takes “questions about my financial history seriously as a member of the Federal Reserve” and will gather facts to answer legitimate questions on the topic.
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