‘Three strikes:’ Mortgage regulator flags third issue in Lisa Cook’s mortgage documents

President Trump’s housing regulator has filed a second criminal referral against Federal Reserve Governor Lisa Cook, this time related to a condominium in Massachusetts.

Federal Housing Finance Agency Director Bill Pulte alleges Ms. Cook took out a 15-year loan on a condominium in Cambridge and listed it as a second home. Months later, she documented rental income from the condo and described it as a rental/investment property, according to Mr. Pulte’s criminal referral to Attorney General Pam Bondi. 

Second homes often receive more favorable loan terms than investment properties, which are viewed as riskier.

The allegations pile pressure on Ms. Cook, who is challenging Mr. Trump’s decision to fire her from the Fed over claims she cited properties in Michigan and Georgia as her primary residences on 2021 mortgage documents.

“3 strikes and you’re out,” Mr. Pulte wrote on X.

President Joseph R. Biden appointed Ms. Cook to the Fed in 2022. Her removal and replacement, alongside confirmation of a pending governor nominee, would give the White House a Trump-appointed majority on the Fed board as he seeks lower interest rates from central bankers.

“This is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence,” Ms. Cook’s lawyer, Abbe Lowell, said Friday in a statement on the second referral. “Nothing in these vague, unsubstantiated allegations has any relevance to Gov Cook’s role at the Federal Reserve, and they in no way justify her removal from the Board.”

Ms. Cook filed a lawsuit in federal court challenging her removal, setting up a clash over presidential authority that could reach the Supreme Court.

She is seeking a temporary restraining order that keeps her at the Fed while the court considers the validity of Mr. Trump’s move to fire her.

Mr. Trump pointed to laws that say a president can fire a Fed governor “for cause,” though what that means is up to interpretation.

“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would be the first of its kind in the Board’s history,” Ms. Cook’s lawsuit said. 

The lawsuit does not explain why Ms. Cook’s mortgage documents said what they did, though it hints at a possible clerical error.

“Even if the President had been more careful in obscuring his real justification for targeting Governor Cook, the President’s concocted basis for removal — the unsubstantiated and unproven allegation that Governor Cook ‘potentially’ erred in filling out a mortgage form prior to her Senate confirmation — does not amount to “cause” within the meaning of the [Federal Reserve Act] and is unsupported by caselaw,” Mr. Lowell, wrote in the lawsuit.

Justice Department lawyers say Mr. Trump is acting within his authority and that Ms. Cook is unlikely to succeed on the merits.