The Justice Department has opened a criminal investigation into Federal Reserve governor Lisa Cook over possible mortgage fraud, issuing subpoenas tied to properties in Ann Arbor and Atlanta, according to The Wall Street Journal. The probe followed criminal referrals from Bill Pulte, Trump’s housing finance appointee, who alleged Cook misled banks to secure favorable lending terms. Cook denied wrongdoing and sued Trump last month, arguing her firing bid is unlawful and aimed at filling the Fed board with allies. A judge is weighing Cook’s request to block her removal from the Fed board ahead of the central bank’s September 16th meeting. Replacing Cook with a Trump ally would give the president a Fed board majority, which Trump has said he expects "very soon." Felony mortgage fraud convictions are uncommon. A 2023 Philadelphia Fed report found one-third of single-family home investors misstate occupancy on mortgage applications.
