In a striking development, former President Donald Trump publicly accused Senator Adam Schiff (D-California) of engaging in mortgage fraud during a press conference on Tuesday. This allegation marks a significant escalation in the White House's ongoing attacks against vocal critics of Trump. According to a senior administration official who spoke to The Washington Post, a criminal case involving Schiff has been referred to the Justice Department.
Trump took to his social media platform, Truth Social, to assert that the financial crimes division of Fannie Mae had identified a “sustained pattern of possible mortgage fraud” involving Schiff. The former president claimed, without providing specific evidence, that Schiff had misrepresented the primary residence status of his home, which allegedly enabled him to secure a more favorable mortgage rate. “I would love to see him brought to justice,” Trump stated during a later interaction with reporters.
The senior administration official, who requested anonymity, indicated that the decision to prosecute now lies with the Justice Department. The official ominously noted that “this is just the beginning, unfortunately,” for Schiff, who previously led impeachment proceedings against Trump while serving in the House before being elected to the Senate last fall.
In response to these serious accusations, Schiff vehemently denied any wrongdoing. He characterized the administration's claims as politically motivated retaliation for his opposition to Trump's agenda. Designating a home as a primary residence can allow borrowers to receive lower interest rates since lenders perceive primary residences as less risky compared to secondary homes or investment properties. However, Schiff’s spokesperson clarified that the lenders for both of Schiff's properties in California and Washington were “well aware” of his intended full-time use of both homes during his time in public office, asserting that neither property functioned as a vacation home.
Schiff expressed his sentiments on social media platform X, denouncing the accusations as Trump’s latest attempt at political retaliation. “This is not surprising; only the weakness of this false allegation stands out,” he remarked.
Legal experts have weighed in on the situation, noting that mortgage fraud cases are routinely prosecuted by the Justice Department. Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan and a law professor at the University of Michigan, expressed skepticism about the timing of the allegations against Trump’s critics. “You don’t get a free pass because you’re a public official,” McQuade stated, but she also expressed concern that the administration's focus on these individuals could undermine the credibility of the Justice Department.
Public documents related to Schiff’s mortgage and property in Montgomery County, Maryland, reveal that he described the property as a second home in October 2020. Earlier documents, however, indicated it was classified as a primary residence. Experts pointed out that such records alone do not provide a complete picture, particularly since the agreements Schiff may have had with his lender are not publicly available. Furthermore, varying definitions of primary residences used by counties and lenders can create confusion regarding potential violations.
The scrutiny of Schiff’s mortgage records seems to resonate with similar investigations into New York Attorney General Letitia James, who has also faced legal challenges from Trump’s administration. Reports indicate that the Justice Department opened a criminal investigation into James’s real estate transactions earlier this year. A grand jury in the Eastern District of Virginia has issued subpoenas concerning a mortgage application where James claimed her intention to make a single-family home in Norfolk her primary residence.
As the investigation into Schiff continues, questions remain about how his mortgage issues came to Trump’s attention. At a separate news conference, Attorney General Pam Bondi stated that she had only just learned about Trump’s post and could not provide any details regarding Schiff’s potential criminal investigation.
Fannie Mae, the massive mortgage entity that purchases and manages a vast number of loans, has refrained from commenting on the matter. Under government control since the 2008 mortgage crisis, Fannie Mae is currently overseen by the Federal Housing Finance Agency. However, a confidential memo from Fannie Mae, shared with The Post by another anonymous administration official, alleged that Schiff had “engaged in a sustained pattern of possible occupancy misrepresentation on five Fannie Mae loans.”
The memo indicated that on May 12, Fannie Mae's financial crimes investigation unit received a document demand from the FHFA inspector general concerning Schiff's home, seeking loan files and other pertinent documents. According to the memo, there were concerns about “occupancy misrepresentation” related to both Schiff's Maryland and California residences, raising doubts about the legitimacy of his claims regarding his primary residence.
The allegations against Schiff add another layer of complexity to the already contentious relationship between Trump and his critics, as both sides prepare for what could be a lengthy and contentious legal battle.
