Letitia James Indicted for Mortgage Fraud

By John DiMauro

New York Attorney General Letitia James has been indicted on charges of mortgage fraud, setting off a firestorm of commentary and sparking intense scrutiny of how the case is being framed in the media. While many outlets are portraying the indictment as politically motivated, the facts—if the allegations hold—appear far more straightforward. As a former mortgage broker well-versed in owner-occupancy laws, I can attest that mortgage fraud of this nature is not especially difficult to prove.

🏠 Definition: Mortgage Fraud for Owner Occupancy

Mortgage fraud for owner occupancy occurs when a borrower falsely represents their intent to occupy a property as their primary residence in order to obtain more favorable loan terms — such as a lower interest rate, reduced down payment, or easier qualification — that are available only to owner-occupants.

In simple terms, it’s lying on a mortgage application about where you plan to live.

The central claim against Ms. James is that she misrepresented her intent to occupy a property as her primary residence in order to obtain favorable financing terms. Owner-occupancy designations grant lower interest rates, smaller down payments, and other benefits—advantages meant for buyers who genuinely intend to live in their homes. As an attorney, Ms. James would have been fully aware of these laws and the consequences of falsifying occupancy information. Prosecutors would not proceed without what they believe to be strong evidence: notarized mortgage documents, sworn affidavits, and lender filings that are difficult to dispute.

Ms. James has often described herself as a strong woman of faith, yet faith in the law seems to have taken a back seat here. Her critics are quick to recall her highly publicized pursuit of former President Donald Trump, including her vow to find ways to take away his properties. She once declared publicly that “no one is above the law.” Now, in an ironic twist, that same standard is being applied to her. If the evidence stands, this could serve as a striking example of poetic justice.

🏛 Federal Mortgage Fraud (18 U.S.C. § 1344 – Bank Fraud)

• Maximum penalty: Up to 30 years in federal prison

• Maximum fine: $1,000,000

• This applies when the fraud involves a federally insured financial institution, which includes nearly all major banks.

• Each separate act (for example, each fraudulent loan application) can be charged as a separate count, meaning multiple 30-year penalties could theoretically be stacked.

⚖️ State-Level Mortgage Fraud

Each state sets its own penalties:

• New York, for instance, can impose up to 25 years for large-scale or repeated mortgage fraud.

• Florida and many other states classify mortgage fraud as a felony, with penalties ranging from 5 to 30 years, depending on the amount of money involved.

💡 Typical Sentences

In practice, most first-time offenders convicted of mortgage fraud receive 3–10 years, depending on:

• The amount of financial loss

• The number of victims

• Whether they cooperated or pleaded guilty

• Prior criminal history

  
  

If convicted, Ms. James could face a sentence of up to 30 years in prison, though the actual penalty would likely be less. Still, accountability must follow the law. A conviction for mortgage fraud should carry meaningful consequences — including potential jail time, disbarment, and resignation from public office. Anything less would undermine the very principles she once vowed to uphold.