This story has so much delicious irony to it, I’m afraid to look in the mirror for fear that I have literally turned into Nelson Muntz, the “Simpsons” character who mocks everyone else’s misfortunes.
The Federal Housing Finance Agency has referred New York Attorney General Letitia James to the Department of Justice for alleged mortgage fraud. Bill Pulte, director of FHFA alerted U.S. Attorney General Pam Bondi in part,“Based on media reports, Ms. Letitia James has, in multiple instances falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms…This has potentially included 1) falsifying residence status for a Norfolk, Virginia-based home in order to secure a lower mortgage rate and 2) misrepresenting property descriptions to meet stringent requirements for government backed loans and government assistance.”
You can read the documents here and here. In one case, the Democratic Party hit-woman charged with executing the lawfare against Donald Trump so he couldn’t run for President received a lower mortgage rate by falsely swearing that a home in Norfolk, Virginia would be her “primary residence” when her job as New York’s Attorney General required her to live in that state. In the other, James misrepresented a five-unit property as a four-family unit to receive “a conforming loan through the Freddie Mae/Freddie Mac Form 3033,” which is only available for buildings with four or fewer units. Hilariously, this is the same woman who prosecuted Donald Trump for misleading financial statements, intoning that “No one is above the law.” Perfect!
While conservative news outlets, websites and blogs were going Full Nelson last night when the news broke, the New York Times as of 7:30 EST this morning doesn’t have a peep about this story on its webpage or print edition. This is a pattern, where the alleged national “paper of record,” now a dependable Democratic Party propaganda mouthpiece, delays news reports detrimental to the progressive “brand” as long as possible, presumably while editors ponder how to spin them. Nah, there’s no mainstream media bias! In other convenient non-news, the Times also so far is ignoring former President Biden’s sad speech last night in which he falsely claimed that Social Security checks were in danger of being delayed and dropped such memorable lines as “I remember watching a bus go by… it was full of colored kids… I had never seen those.” Hey, it’s only the first pubic address by the previous President since he left office! News? What news?
Still, I don’t know why the Times is having trouble concocting its fake news to frame the James story: you know what it will be, don’t you? Come on…here. I’ll give you 30 seconds, but don’t forget, you have to state your answer as a question…
Got it? The question is, What is ” Justice Department Seeks to Exact Trump’s Vengeance on Letitia James”?
Ethics Alarms 
Hilariously, this is the same woman who prosecuted Donald Trump for misleading financial statements,
Who was the victim of Trump’s allegedly misleading financial statements?
Michael,
Since we both know that none of the institutes involved in this case lost money gambling on Trump, let us for a moment grant that Trump’s misleading financial statements were indeed criminal. (I don’t believe that based on the evidence I heard, but I could be convinced if financial consultants I trust reviewed all the data and declared Trump’s financial reports to be fraudulent.) Does it matter that no one lost money? That, it would seem to me, would fall into the category of moral luck. If he broke the law with his fraudulent reporting, it shouldn’t matter that no one was hurt, because it could have just as easily gone the other way, with institutions losing millions of dollars. We arrest people for drunk driving because, even if the drunk driver made it home safely, that was just moral luck. His impairment while driving could have just as easily ended in a wreck or killed someone. So I don’t find your question, “Who was the victim…” particularly compelling.
Let’s not forget the alleged fraud involved hyped up valuations made by the Trump organization and provided to the prospective lenders. No lender on earth relies on valuations made by the borrower. Thus, I’d say the supposedly fraudulent valuations were entirely immaterial.
From a legal standpoint, perhaps immaterial. From an ethical standpoint, material and wrong.
No. Appraisals are opinions. Everyone hires their own appraiser. Standard industry practice.
I mean… That’s true, technically, but kind of beside the point. Go one step further: If that was entirely true, why would anyone pay someone to create a valuation for their bank?
The answer is that property valuations aren’t an exact science. Personal valuations are made to argue against the valuations of the mortgaging entity to negotiate a better rate, which everyone admits happened. By submitting a bogus valuation, Trump negotiated a better rate than he would have gotten without it. He (and the banks, chillingly) were arguing that this was a known and common practice, and so they weren’t defrauded. Which is probably true.
The problem might be though, that risks tend to be indexed, and I have the impression that enough large accounts defrauding the bank in the same way Trump did probably causes people on the bottom end of the index to either end up with worse rates, or ineligible for mortgages of their own. There’s also the likelihood that the bloated valuations of the properties, on aggregate, leads to an artificial valuation bubble, further harming people on the low end of the index.
So let’s not pretend that the act was harmless, or benign, the problem with Trump’s prosecution wasn’t that he was innocent, it was that the prosecution was political, and if a prosecutor wanted to start charging on these, they should probably not start with the Republican nominee for POTUS.
In twenty years of documenting and closing real estate loans for banks and insurance companies, I never saw an appraisal submitted by the lender. Lenders are audited. They’d be dinged by their auditors and the regulators if they were found to be giving any credence whatsoever to any appraisal other than one done by an appraiser they had hired.
Grr. Typo. I never saw an appraisal submitted by the BORROWER.
You’ve kind of made my point. Your customers didn’t have the means or the leverage to make those submissions… But there self-evidently is a class of real estate dealer who does.
In short, HT, I can’t see a borrower’s idea of the value of his collateral could possibly have any effect whatsoever on the rate the lender would end up giving the borrower. And come on, this is Donald Trump. You don’t think lenders in his orbit knew very well he exaggerates everything?
Again…. When Trump was first charged, the people commenting on the charges were almost uniformly against them not because what Trump did was harmless, but because prosecuting what Trump did would have severe repercussions in the market because there were a whole lot of very big players doing the same thing.
It really doesn’t matter that you or I have never seen rate negotiations like that… My whole point is that these are the purview of a very wealthy superclass of real estate transaction, and the mere existence of that class disenfranchises everyone who isn’t in it…. Which apparently includes everyone you’ve ever done business with.
Why else would very rich people independently pay for their own valuations and present them to lenders?
Luis Rossman is an electronics repair business owner who rose to fame due to his advocacy of right to repair. Rossman’s electronics repair business was located in New York city. He was looking for a new location for his growing business, and faced endless examples of deceit in the rental listings. He was looking for a specific amount of area, and it was very common to WILDLY exaggerate the square footage. They’d include any form of usable space, double that number and advertise that space.
Rossman did a series of videos on the topic. When challenging real estate agents, they’d just say “That’s how NYC real estate works.”
A few years later the case against Trump started. Rossman right away said he’s very much anti-Trump, but this made many in the real estate business nervous as they all did what Trump was accused of doing.
I’ve heard before that tyranny is passing laws that many break with impunity, but only those undesired by the powerful are prosecuted. That’s the shoe that fits here.
Which would be an argument in a criminal case, not a lawsuit for compensatory damages.
I would also hazard that, along with the revenge angle, we’ll see justification for what Ms. James did with an “everybody does it” rationalization, as well as pulling the race card. As a black woman, she would be discriminated against, or as a black woman, she is taking what is owed to black people and should be applauded for tricking rich white men out of more money. Take an extra shot if the word “nothingburger” is included in the expose.
Still, to be consistent with my disdain for news organizations pouncing on matters like this, I would rather the media keep quiet until they do a thorough investigation. I would also prefer that criminal matters be reported very cautiously so that people are not tried in the court of public opinion. Until Ms. James is convicted in a court of law, I will assume her innocent.
Though, did she really report her father as her husband? And was that inaccurate?
I’m betting there will be more than a few “There’s no proof!” tossed around among the official DNC talking points on offer this morning. But maybe it’s one of the five or six default talking points that lead every memo.
The media is… so gross right now.
Letitia James defrauds banks in the exact same was she very famously prosecuted Trump for, and media outlets are sitting on it? Probably figuring out how they’re going to spin it… Which is also particularly gross lately.
Take CTV as an example: A far left anarchist lunatic set fire to the Pennsylvania governor’s mansion recently. The arsonist’s background is known, and uncontroversial: Shapiro, a Democrat, was too centrist and capitalist for his taste, maybe with a side of “The Michigan Problem” which is Democrat in-speak for the rampant antisemitism in their ranks.
How did CTV report that? That he was a registered independent who had criticized Biden.
Does anyone, for a second, believe that if this guy was a proud boy, that wouldn’t have been the top line of dozens of different news stories by now?
I know I obsess about this and readers are sick of my obsession, but it really is as important an ethics story/scandal as anything else. Your example is perfect. Journalists, who are duty bound to allow the public to know what is happening so they can make intelligent decisions about their lives, their government, their associations, instead see their role as controlling and manipulating those decisions according to their own desires and interests. I don’t know how else to address the problem other than to expose it.
It appears to me that the best course of action contains two elements:
Letitia James should be happy if she is not convicted for a crime, and can keep her license to practice law. A dismissal with prejudice of the charges against Donald Trump would render all discussions (legal, ethical) about Trump’s financial statements moot.
This is an example of the lesson leaders and nations alike have failed to grasp – if you strike for the king, strike to kill, and do not fail. World War II was probably lost by the Japanese when Nagumo decided NOT to execute the final strike that would have targeted the fuel depots and repair facilities. Hitler probably blew it when he lost the Battle of Britain and had to cancel Operation Sea Lion. The Austrians doomed themselves when they failed to exploit the victory at Caporetto. Believe it or not, the British probably lost the American Revolution fighting no Americans in a battle not fought on American soil, when RN Admiral Thomas Graves was slow moving his ships into position in the Chesapeake and so couldn’t get into line of battle in time to fight the French effectively, cutting off British supply and preventing Cornwallis escaping to sea.
The left failed in multiple attempts to take Donald Trump down by lawfare, and now they find themselves in his sights, with the full power of the executive branch. Normally I’d tell Trump to forget this and get back to work doing for the American people like he was elected to do, but I think at least some examples need to be made here, so that overambitious prosecutors are discouraged from doing similar things in the future.
Not only do they deserve to be prosecuted, they deserve the full treatment that many of Trump’s supporters got.
No one gets to surrender to the police in a polite manner. The FBI busts in their door at 4AM and they get drug out in their pajamas in front of right wing media cameras that somehow got notified in advance of the raids.
The headline for Independent by Joe Sommerlad today is: “New York AG Letitia James targeted for criminal prosecution by Trump admin“
Of course.
The talented Jonathan Turley: “(The NY AG Letitia James) Documents Are Quite Damning”
Sigh; who to believe…
PWS
My Trump-deranged sister is convinced that the accusations against James are all contrived.
How does she deem Turley? Would alerting her to his opinion be productive?
PWS
Hi Jack, A few days ago I refreshed my account information on Ethics Alarms.I ichecked a box for an email notification of new comments, thinking this meant comments on my own posts.. No, now I’m flooded with email notification of every comment.Please make it stiop. I read every Ethics Alarms post every day. I have rarely cpommented, but WordPress lately has made it almost impossible to get a comment entered. Apparently Old Bill, Chris M, Humlble Talent, Extraterrestrial Cephalopod, and others have no trouble, but I’m at sea. Anything you could do to make interaction with EA more efficient would be great. Thanks, Bob Wagner (Bob in NJ)
I can’t speak for his sister, but mine will reject any source that isn’t one she regularly frequents. Further, any documents produced by this administration – regardless of when they were made – will be suspect.
You cannot reason with them. They simply cannot accept it.