A lawyer for Federal Reserve Governor Lisa Cook told the White House on Wednesday that allegations Cook committed mortgage fraud before joining the Fed are “unfounded and untrue.” As a result, attorney Abbe Lowell wrote, any effort to remove Cook from her job based on those allegations would be “corrosive of the independence that Congress sought to preserve” for the Federal Reserve Bank.
Lowell’s letter came approximately a year after William Pulte, the head of the Federal Housing Finance Agency, sent two criminal referrals regarding Cook to the Department of Justice, and just under two months after the Supreme Court, by a vote of 5-4, rebuffed President Donald Trump’s initial attempt – citing the mortgage fraud allegations – to fire Cook. The opinion by Chief Justice John Roberts held that “Cook was entitled to notice and some opportunity to respond” before she could be fired.
On Aug. 5, White House Deputy Chief of Staff Dan Scavino notified Cook that Trump was “considering” whether to remove her from the Fed, and he gave her 21 days to respond to the mortgage fraud allegations.
In Cook’s response, Lowell explained that when Cook in 2021 signed a mortgage agreement to buy a condominium in Atlanta that designated the property as her “primary” residence although she had signed another agreement listing her home in Michigan as her primary residence, it “was an entirely inadvertent oversight,” without any “intentional misconduct and zero intent to defraud or mislead.” Cook had gone to the lender’s website, Lowell emphasized, to get information about a mortgage for a vacation home – which, he wrote, was “a clear indication of the loan type she was looking to acquire.” Indeed, Lowell noted, the mortgage lender “knew that she had lived in Michigan for more than 15 years and worked full-time as a tenured professor at Michigan State University.” “All the information Governor Cook provided concerning her Michigan residence and employment,” Lowell stated, “indicated that she did not intend to make her Atlanta condominium her principal residence.”
The letter also pushed back against suggestions that a rental listing for the Atlanta condo provided “further proof of wrongdoing” on Cook’s part, by demonstrating that the condo was not her primary residence. Cook’s mortgage agreement did not prohibit her from renting the property, Lowell stressed. And in any event, Lowell added, “though Governor Cook briefly listed the property for rent, she ultimately decided not to rent it.”
Lowell pointed to reporting that suggests that several senior officials in the Trump administration – including Treasury Secretary Scott Bessent and Attorney General Todd Blanche – had also “entered into ‘primary’ residence mortgages for multiple homes,” noting that those men had not been fired.
Indeed, Lowell noted, in 1993 Trump himself “reportedly acquired ‘primary’ residence mortgages for two different Florida homes just seven weeks apart.” Although Trump “signed a form attesting” that he would live in those properties for at least a year, he actually lived in New York during that time and “reportedly listed both Florida properties for rent.”
Finally, Lowell submitted an expert opinion from Kathleen Engel, a law professor at Suffolk University Law School who specializes in mortgage finance and regulations. She indicated that, based on the materials that she had reviewed, “no banking or mortgage professional can reliably conclude that” Cook received more favorable terms for either her Atlanta or Michigan mortgages because they were listed as primary residences, that either mortgage “lender relied on an allegedly false occupancy representation” in deciding to lend to Cook, or “that Dr. Cook acted with an intent to deceive.”
