Letitia James’ Mortgage Controversy: The Legal Questions Surrounding Her Brooklyn Property
For over 20 years, Letitia James listed her Brooklyn apartment building as a four-unit property when applying for mortgages—despite official records proving it had five. This misrepresentation allowed her to secure better loan terms, including a government-backed modification in 2011 that saved her tens of thousands of dollars annually.
Now, the same legal principles she has enforced on others may be coming back to haunt her.
A Questionable Property History
In 2001, Letitia James purchased a multi-family apartment building in Brooklyn for $550,000. The structure had five units, according to the city’s Certificate of Occupancy. However, on multiple mortgage applications over the years, James listed the building as having only four units.
This distinction is crucial. Mortgage lenders classify buildings with four or fewer units as residential properties, which qualify for lower interest rates. Buildings with five or more units are considered commercial properties and face higher lending costs.
Refinancing and the HAMP Loan
By 2005, James refinanced her mortgage with an adjustable-rate loan that started at 7.2% and could rise to 10.2%. As rates increased, she sought relief through the Home Affordable Modification Program (HAMP) in 2011.
HAMP, part of the Troubled Asset Relief Program (TARP), was designed to help homeowners at risk of foreclosure. To qualify, a property had to be owner-occupied with no more than four units. On her application, James stated that her building met this requirement, despite city records showing otherwise.
Financial Hardship Claims Raise Eyebrows
To receive HAMP assistance, applicants had to prove financial hardship. James submitted a statement claiming she could not afford her mortgage payments. However, public records show she earned at least $126,390 that year—$122,500 from her role on the New York City Council and $3,890 from CUNY.
Additionally, she collected rental income from the apartment building. HAMP guidelines require applicants to demonstrate a verified inability to pay, casting doubt on her claim of financial distress.
A Lucrative Deal Under Scrutiny
Despite these inconsistencies, James secured the loan modification. Her new interest rate dropped to just 2.7%, saving her approximately $44,000 per year. HAMP regulations require borrowers to certify the accuracy of their applications under penalty of law. Providing false information could constitute mortgage fraud, a federal crime with serious consequences.
A Legal Double Standard?
Letitia James has built her career on prosecuting financial misconduct. In February 2024, she led a case against Donald Trump, arguing that inflating asset values for better loan terms was fraudulent. After the ruling, she stated:
“When powerful people cheat to get better loans, it comes at the expense of honest, hardworking Americans.”
This statement raises an important question: Should the same legal standard be applied to her own mortgage history?
Federal agencies, including the U.S. Treasury, have the authority to investigate potential HAMP abuses. If James knowingly misrepresented her financial situation and property details, her actions could warrant legal review.
As she has often declared, “No one is above the law.” Now, the question is whether those words will apply to her as well.
Joel Gilbert is a Los Angeles-based film producer and president of Highway 61 Entertainment.
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