She’s facing a major legal scandal.
New York Attorney General Letitia James is accused of misrepresenting the number of units in her Brooklyn apartment building on multiple mortgage applications, potentially committing mortgage fraud. According to Joel Gilbert, who revealed the issue, James listed her property as having four units, though official records indicate it has five. This misrepresentation may have helped her secure favorable mortgage terms, saving tens of thousands of dollars annually. James purchased the four-story building, which contains five apartments, for $550,000 in 2001, and refinanced it in 2005 with an adjustable-rate loan.
Over the years, James reportedly continued to list the building as a four-unit property in her mortgage applications. However, the Certificate of Occupancy from 2001 classifies it as a five-family dwelling. Properties with four or fewer units are eligible for residential mortgage rates, while those with five or more units fall under the “commercial” category, which often comes with higher interest rates. One of the mortgages she took advantage of was the Home Affordable Modification Program (HAMP), designed for owner-occupied properties with no more than four units.
In 2011, despite earning a high salary of $126,390 and additional rental income, James allegedly qualified for this program, which was meant for individuals facing financial hardship. The program requires applicants to prove a financial hardship to receive low-interest loans, and providing false information could result in penalties under federal law. James is said to have received a loan with a low-interest rate of 2.7%, saving approximately $44,000 annually.
This is not the first time James has faced scrutiny regarding her property dealings. In 2020, fraud investigator Sam Antar uncovered discrepancies in her Norfolk, Virginia property records. James reportedly purchased the property for $137,000 but later took out a mortgage of up to $400,000, falsely listing it as a “second home” instead of an investment property. The property was consistently labeled as an income-generating investment in her state disclosures, raising questions about the financial benefit she gained from the misrepresentation.
In addition to the mortgage issues, Antar also discovered handwritten alterations on James’ mortgage documents, further complicating her financial dealings. These discrepancies have raised concerns about her eligibility for favorable mortgage terms and whether she misrepresented the nature of her properties to benefit financially.
