Oh Letitia, how could you?

[DJ Spanky]

Big Development: Is Letitia James Guilty of Mortgage Fraud?

Whoopsie!

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.

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.”

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.”

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.

 

[psuted]

This is premium content. Please subscribe to view.

 

[The Spin Meister]

This is premium content. Please subscribe to view.

 

[m.knox]

This is premium content. Please subscribe to view.

 

[psuted]

This is premium content. Please subscribe to view.

 

[m.knox]

This is premium content. Please subscribe to view.

 

[psuted]

This is premium content. Please subscribe to view.