Guest post by Joel Gilbert, with minor editorial adjustments for clarity and formatting.
For over two decades, Letitia James repeatedly claimed her Brooklyn apartment building was a four-unit property on mortgage applications—despite official records proving it had five.
This may seem a minor discrepancy, but misrepresenting the unit count enabled her to secure more favorable loans, including a 2011 Home Affordable Modification Program (HAMP) loan that saved her tens of thousands of dollars annually.
Now, the same legal principles she used to prosecute others may be turning against her.
It all began in 2001 when Letitia James purchased a four-story multi-family apartment building with five apartments in Brooklyn for $550,000.
In 2005, James refinanced the building with an adjustable loan from Aegis that started at an interest rate of 7.2% with a ceiling of 10.2%.
For the next two decades, James took out refinancing mortgages and always listed the number of units as four.
However, the official record in the most recent Certificate of Occupancy, dated January 26, 2001, says the property is legally classified as a five-family dwelling. In the world of mortgage lending, this is a critical distinction.
(Please note: The New York City Department of Buildings mandates that any alteration affecting the use, egress, or occupancy of a building necessitates an updated C of O.)
Properties with four or fewer units qualify for more favorable “residential” interest rates, while those with five or more are classified as “commercial” properties—often subject to higher rates.
Fast-forward to 2011. With her 2005 adjustable-rate mortgage likely escalating toward 10.2%, James sought relief from HAMP – a federal initiative under the Troubled Asset Relief Program (TARP) designed to assist homeowners at risk of foreclosure.
HAMP, however, had strict eligibility requirements. According to its official Making Home Affordable Program Handbook, “Eligibility is limited to owner-occupied properties with no more than four units.”
The reasoning was clear: the program aimed to assist regular homeowners and not landlords of multi-family rental apartment businesses.
In her HAMP application, James listed her property type as: DWELLING ONLY – 4 FAMILY (apartments).
However, as confirmed by the 2001 Certificate of Occupancy, the building was officially designated as a five-family apartment dwelling – making it ineligible for the HAMP program.
Additionally, James submitted a financial hardship statement in her application, declaring: “I am experiencing a financial hardship, and as a result, (i) I am in default under the Loan Documents, and (ii) I do not have sufficient income or access to sufficient liquid assets to make the monthly mortgage payments now or in the future.”
Yet, public records indicate that in 2011 Letitia James earned at least $126,390. Of that total, $122,500 was from her position on the City Council of New York City, and another $3,890 from her work at CUNY.
She also earned rental income from her building. The HAMP guidelines explicitly state that applicants must provide “a verified financial hardship that prevents them from making their mortgage payments.”
Given James was a single woman with no children, with a high salary and rental income, her claim of “hardship” was suspect at best.
James successfully secured the HAMP loan, refinancing her mortgage at an interest rate of just 2.7% – a dramatic reduction. The result for Letitia? An estimated savings of at least $44,000 per year.
HAMP regulations required borrowers to certify the accuracy of their application, warning: “False statements may be punishable by fines, imprisonment, or both under federal law.”
Mortgage fraud is defined under federal law as knowingly making false statements to obtain a loan under false pretenses. It carries serious penalties, including fines and imprisonment.
HAMP abuses fall under the jurisdiction of the U.S. Department of the Treasury, it has the power to enforce compliance and investigate potential misuse.
As the world knows, James is a tireless warrior against real estate fraud.
In February 2024, James led a high-profile fraud case against Donald Trump, securing a judgment that found Trump guilty of inflating asset values to secure better loan terms.
During her victory speech, James declared: “When powerful people cheat to get better loans, it comes at the expense of honest and hardworking people. Everyday Americans cannot lie to a bank to get a mortgage to buy a home. No matter how big, rich, or powerful you think you are, no one is above the law.”
Given the clear discrepancies in James’ HAMP application, regarding both her financial hardship and the number of apartment units, this case warrants immediate review by federal enforcement agencies. The question remains: Will the same legal standards James enforced on others be applied to her own real estate financing history? After all, as James has assured us, “No one is above the law.”
Joel Gilbert, is a Los Angeles-based film producer, and president of Highway 61 Entertainment.
The opinions expressed are those of the author and not necessarily those of Gateway Pundit.
