Three words in Letitia James' mortgage contract doom the fraud case against her

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In a five-page indictment, James is charged with two counts of financial fraud in connection with her 2020 purchase of a three-bedroom house in Norfolk, Virginia. Lindsey Halligan, Trump’s handpicked top federal prosecutor in the Eastern District of Virginia, alleges James signed a “Second Home Rider” contract that prohibits renting the property. James then rented out the home anyway, in violation of those loan terms and federal bank and mortgage fraud laws, according to the indictment.

POLITICO obtained James’ mortgage documents, including her signed “Second Home Rider” from the Norfolk Circuit Court Clerk’s Office. The rider, a standard addendum to mortgage contracts developed by Fannie Mae and Freddie Mac, requires James to “maintain exclusive control over the occupancy of the Property, including short-term rentals.” The idea is to restrict buyers’ ability to use a “second home” as an “investment property” — by hiring a management company and using it primarily to generate income — after obtaining the lower loan rates associated with houses purchased as vacation or “second” homes.

That final, three-word phrase in the rider — “including short-term rentals” — could be decisive. In plain English, the provision means that James is explicitly permitted to rent the place out periodically, so long as she remains in charge of matters such as the number of tenants and how they use the property, legal experts say. The contract’s restrictions bar James from giving “a management firm or any other person or entity any control over the occupancy or use of the Property.”

Halligan has alleged that James used the house “as a rental investment property, renting the property to a family of (3),” but not that she ever hired a property-management company or some other third party to oversee the Norfolk home.

https://www.politico.com/news/2025/10/29/letitia-james-mortgage-contract-indictment-00625010?nid=0000014f-1646-d88f-a1cf-5f46b7bd0000&nname=playbook&nrid=0000016a-c134-d13a-abea-c577ae4e0000