Not trying to make a political point here.
I spent years as a mortgage banker at Quicken Loans (now Rocket Mortgage), the number one mortgage lender in the country, before I ever went to law school. So when I see stories like this, I look at them a little differently.
Hereās the deal. How you classify a property as a primary, secondary, or investment home changes everything about the loan. The down payment, the interest rate, the underwriting, all of it.
Primary or secondary homes can get by with as little as 3 to 10 percent down.
Investment properties usually require 25 percent or more.
So if youāre a brand new real estate investor with limited cash, thereās a big incentive to call something a āsecond homeā instead of an āinvestment property.ā
But thatās why lenders make you sign a Second Home Rider, a separate document where you specifically promise youāll use it as a second residence, not rent it out.
You also assert like NINE times in the application process it will be owner occupiedā¦
Could this kind of thing ever be an honest mistake? I doubt it.
The facts, at least as reported, look pretty bad.
You buy a house, say itās a second home, immediately rent it out, tell your insurer itās owner-occupied, and then report rental income on your taxes.
Thatās not a misunderstanding. Thatās a pattern.
By the way guys, taking home owners insurance under the misrepresentation that itās a primary for better rates is a great way to have a claim denied when your house burns down.
Very shortsighted mistake that many make...
Would a bank ever catch this on their own? Probably not.
Banks rarely dig that deep unless thereās a default or an insurance claim.
They just donāt have the infrastructure or frankly the desire to chase it down.
So yes, itās definitely selective prosecution.
The amount of money at issue is small, and most people would never be charged for something like this.
But still, if the facts are accurate, itās just a series of really bad moves.
And the wild part is that sheās a lawyer.
Sheās the Attorney General of New York.
Sheās prosecuted the former president for similar financial misrepresentations.
Youād think someone with that background would fully understand what those documents say and what it means to misstate intent on a loan.
Itās going to be a tough case for her to defend, unless sheās able to present additional information that clarifies the situation.
Itās possibleā¦
In the meantime, there are lots of financial and life lessons in this story for all of us.
Here is the evidence that changed my mind.
The NY AG has some real issues:
Evidence DOJ says proves Letitia James defrauded the bank:
1. Claimed Norfolk home was a āsecondary residenceā to get better loan terms
2. Signed a āSecond Home Riderā promising to live there
3. Actually rented it out to tenants
4. Reported rental income on her tax returns
5. Told insurer it was owner-occupied
6. Saved ~$18,933 from the false claim
ā Case filed 10/9/25, E.D. Va.