Pulte Ups Cook Scrutiny With DOJ Referral on Third Mortgage (1)

Federal Housing Finance Agency Director Bill Pulte sent a new criminal referral against Federal Reserve Governor Lisa Cook, intensifying the Trump administration’s pressure campaign against the central bank board member over allegations of mortgage fraud.

The new referral, in a letter to US Attorney General Pam Bondi dated Aug. 28, concerns a third property in Massachusetts and follows a complaint earlier this month alleging that Cook fraudulently listed homes in Michigan and Georgia as her “primary residence” when she obtained mortgages in 2021, a declaration that typically secures more favorable loan terms.

The latest complaint alleges Cook took out a mortgage agreement on a condominium in Cambridge, Massachusetts for $361,000, claiming that the property was a second home. Pulte alleges that eight months later, however, Cook declared that she had earned between $15,000-$50,000 in rental income and declared it an investment property.

Cook’s attorney, Abbe Lowell, said in a statement that “nothing in these vague, unsubstantiated allegations has any relevance to Gov. Cook’s role at the Federal Reserve, and they in no way justify her removal from the Board.”

“This is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence,” Lowell said.

The Federal Reserve declined to comment.

WATCH: Lawyers for Federal Reserve Governor Lisa Cook will be in federal court today to try and save her job.

Source: Bloomberg

President Donald Trump moved to fire Cook after the initial criminal referral, setting the stage for a contentious legal fight and escalating his battle with the central bank. Trump has hammered the Fed and its chair, Jerome Powell, to lower interest rates, and successfully ousting Cook would allow him to secure a majority on the central bank’s board of governors.

Cook, though, is seeking to block the move, filing a lawsuit in federal court on Thursday that labeled the president’s bid to oust her as “illegal” and casting it as a bid to seize control of the Fed. Her lawyers have also suggested that an unintentional “clerical error” may be behind the mortgage disputes in Pulte’s first criminal referral. The Department of Justice has already signaled plans to investigate Cook over the earlier referral.

Read more: Cook Signals ‘Clerical Error’ May Be Behind Mortgage Dispute

The latest Pulte referral also raises additional concerns about the Michigan and Georgia properties at the heart of the original referral. Pulte says that FHFA has reason to believe Cook’s Michigan property is “currently being used as a rental property,” and that she appears to have tried to rent the Georgia property despite calling it a “personal residence” in federal disclosures. He asks the Justice Department to investigate whether Cook has made “further potential criminal violations as well as material misrepresentations” in order to, among other things, “acquire and maintain her position as governor.”

Pulte has attacked Cook over social media in recent days. “No one is above the law,” he wrote on Thursday after she filed her lawsuit, posting a graphic that he said shows matching signatures on mortgage documents for the properties in Michigan and Georgia.

US District Judge Jia Cobb, an appointee of former President Joe Biden, has set a hearing for Friday on Cook’s request for a restraining order as she seeks to remain in her role.

Explainer: What Happens Next in Trump Fight With the Fed’s Cook

(Adds Lowell comment in paragraphs 4-5.)

--With assistance from Amara Omeokwe.

To contact the reporter on this story:
Josh Wingrove in Washington at jwingrove4@bloomberg.net

To contact the editors responsible for this story:
Justin Sink at jsink1@bloomberg.net

Jordan Fabian

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