New York Attorney General Letitia James reacts as she stands outside the U.S. District Court for the Eastern District of Virginia, after she attended a hearing and pleaded not guilty to charges that she defrauded her mortgage lender, in Norfolk, Virginia, U.S., October 24, 2025. REUTERS/Jonathan Ernst
On Tuesday, October 28, U.S. District Judge Cameron McGowan Currie requested "all documents relating to" interim U.S. attorney Lindsey Halligan's "participation in the grand jury proceedings" against New York State Attorney General Letitia James — a longtime foe of President Donald Trump who was indicted for mortgage fraud in the U.S. Department of Justice's (DOJ) Eastern District of Virginia.
The indictment alleges that James lied to lenders in order to get a better rate on a mortgage for a second home and that renting the property was a violation of the mortgage terms.
But Politico's Hassan Ali Kanu, in an article published on October 29, reports that there is a "glaring issue" with the indictment: "The mortgage contract James signed does not prohibit renting out the house, according to Politico's review of the contract and legal and real estate experts."
"In fact," Kanu explains, "the key language in the contract expressly allows renting under certain conditions…. Politico obtained James' mortgage documents, including her signed 'Second Home Rider' from the Norfolk Circuit Court Clerk's Office. The rider, a standard addendum to mortgage contracts developed by Fannie Mae and Freddie Mac, requires James to 'maintain exclusive control over the occupancy of the Property, including short-term rentals.' The idea is to restrict buyers' ability to use a 'second home' as an 'investment property' — by hiring a management company and using it primarily to generate income — after obtaining the lower loan rates associated with houses purchased as vacation or 'second' homes."
Kanu continues, "That final, three-word phrase in the rider — 'including short-term rentals' — could be decisive. In plain English, the provision means that James is explicitly permitted to rent the place out periodically, so long as she remains in charge of matters such as the number of tenants and how they use the property, legal experts say. The contract's restrictions bar James from giving 'a management firm or any other person or entity any control over the occupancy or use of the Property.'"
Politico discussed the case with Adam Levitin, a law professor at Georgetown University in Washington, D.C. known for his expertise on banking and finance law.
Levitin told Politico, "The core of the allegations is that James knowingly lied that she was not going to rent. The problem is there is absolutely no statement ever made by James that she would not rent out the property — the contract language does not prohibit rentals, it prohibits rentals via a third party."
Similarly, real estate consultant Eric Forster told Politico, "There's nothing in the Second Home Rider that says that when you're not using (the home) for vacation, that it must be vacant the rest of the time."
Read the full Politico article at this link.