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Second Home Rider Raises New Questions in Letitia James Mortgage-Fraud Case

A Politico review found the mortgage contract allows owner‑controlled short‑term rentals, casting doubt on the core theory that any renting breached the loan.

Overview

  • Politico obtained James’ mortgage documents from the Norfolk court and identified a Fannie/Freddie Second Home Rider that includes the phrase “including short-term rentals.”
  • Legal and real estate experts say the rider permits periodic rentals if the owner retains control over occupancy, which conflicts with prosecutors’ claim that renting was barred.
  • Fannie Mae and Freddie Mac guidance has been cited as consistent with allowing certain short‑term rentals under the rider’s conditions.
  • U.S. District Judge Cameron McGowan Currie ordered production of all documents related to interim U.S. Attorney Lindsey Halligan’s participation in the grand jury proceedings.
  • The indictment alleges James treated the house as rental property on Schedule E, while separate reporting says a grandniece lived largely rent‑free; James has pleaded not guilty and is set for trial on January 26, 2026.