Mortgage fraud frenzy: Now, even President Donald Trump is among the accused. Could any homeowner fall into the trap?

In 1993, Trump signed mortgages on two Palm Beach properties seven weeks apart, pledging each would be his principal residence. Records show he never lived in either home — instead renting them out as investment properties.

If fraud accusations can target everyone from political rivals to a sitting president, should ordinary homebuyers worry they could face similar charges?

Political players accused of mortgage fraud

The cases center on "occupancy fraud," or incorrectly claiming a home is your primary residence to secure better mortgage terms, like lower interest rates.

According to ProPublica's mortgage experts, it’s often legal and rarely prosecuted. But it is at the heart of Trump's allegations against his foes.

Here’s the chronology of the political players caught up in claims of mortgage fraud:

In July, Sen. Adam Schiff was accused.

The president alleged that Schiff had engaged in a “sustained pattern of possible mortgage fraud” — a charge Schiff denies.

He has yet to be indicted, and as *Associated Press *reports, the Department of Justice has launched an internal investigation into the handling of the case (2).

In August, Federal Reserve Governor Lisa Cook was accused.

Trump accused her of claiming two properties as her primary residence within weeks, writing to her: "It is inconceivable that you were not aware of your first commitment when making the second."

In November, Cook’s lawyers called for the case against her to be dropped, describing the charges as “baseless” (3).

The Supreme Court, which will hear arguments in the case in January, ruled she could remain in her position at the Federal Reserve while she challenges the charges (4).

In October, New York Attorney General Letitia James was accused.

James was originally indicted on charges of bank fraud and making false statements (5).

Prosecutors claimed she bought a Virginia home pledging it as her second residence, then rented it out as an investment property.

She faced up to 30 years in prison per count and fines of up to $1 million per count if convicted, but the case against her fell apart.

A grand jury rejected prosecutors' attempt to bring new charges after a judge dismissed the original indictment, ruling the U.S. attorney was illegally appointed (6).

The rejection represents one of several instances where the Justice Department has struggled to secure indictments in Trump administration prosecutions.

In November, Congressman Eric Swalwell was accused.

Swalwell is the latest Trump critic accused by the Trump administration of possible false or misleading statements related to mortgages (7).

In a statement he shared with NBC News, he wrote: "As the most vocal critic of Donald Trump over the last decade and as the only person who still has a surviving lawsuit against him, the only thing I am surprised about is that it took him this long to come after me.”

In December, President Donald Trump himself faces scrutiny.

So what about the Pro Publica allegations against Trump?

No federal investigation has been launched at this point and there are no charges of mortgage fraud against the president.

But his situation appears more egregious, as he claimed both properties would be his primary residence before renting them out.

Who's actually at risk of being convicted of mortgage fraud

Despite high-profile cases like these, actual mortgage fraud is remarkably uncommon.

According to Cotality, only 1 in 118 mortgage applications in Q3 2025 showed fraud risk indicators — less than 1%.

Even within that tiny percentage, occupancy fraud ranks "lower down on the totem pole" compared to other types, according to Kimber White, president of the National Association of Mortgage Brokers, as reported by BBC News (8).

Here's the crucial detail: these allegations only apply to people who own multiple properties.

According to the National Association of Home Builders, only 4.6% of U.S. homes are second homes. As of 2022, there were 6.5 million second homes nationwide out of approximately 142 million total housing units (9).

So if you're buying your first home or only own one property, occupancy fraud allegations are essentially impossible.

Even with multiple mortgages showing conflicting occupancy claims, proving criminal fraud remains difficult.

"Mistakes … as honest as a clerical error … can be made," said Clifford Rossi, finance professor at the University of Maryland and former Citi chief risk officer, according to BBC News.

This can be as simple as a parent co-signing with an adult child mistakenly checking the "primary occupant" box without intending fraud.

During the 2008-2009 financial crisis, Rossi's team at Citi identified suspected fraud cases, but attorneys said they'd be tough to prove, so his team didn't take legal action.

"You get into these issues of 'Did you really mean to check this box or not?' (4)"