In California, homeowners are entitled to claim the Homeowners’ Exemption for a home that is their principal residence. The exemption isn’t worth all that much, just $7,000 off the assessed value, translating to a $70 per year reduction in property taxes. Many homeowners don’t even bother to file for it.
However, if you happen to be an elected official who is required to live in the state of California, declining to file an official form stating that you actually live where you purport to live could attract unwanted attention.
On August 5, Fox News’ Laura Ingraham broke the story that Senator Adam Schiff “is under criminal investigation for mortgage fraud.”
Allegedly, at the same time that Schiff claimed the Homeowners’ Exemption for a 650-square-foot condominium in Burbank, he signed multiple documents claiming that his primary residence was a property in Maryland.
Federal Housing Finance Agency Director William Pulte sent a letter to Attorney General Pam Bondi in May citing media reports that Schiff has “in multiple instances, falsified bank documents and property records to acquire more favorable loan terms, impacting payments from 2003-2019 for a Potomac, Maryland-based property.”
Pulte wrote, “As regulator of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, we take very seriously allegations of mortgage fraud or other criminal activity. Such misconduct jeopardizes the safety and soundness of FHFA’s regulated entities and the security and stability of the U.S. mortgage market.”
In 2020, Schiff finally designated his expansive Maryland residence as a second home, continuing to assert that his primary residence is the one-bedroom, one-bath condo in Burbank.
Schiff has opened a legal defense fund. He may or may not be in serious jeopardy for allegedly falsifying mortgage documents to get more favorable loan terms over a period of 16 years, but his constituents in California have every right to be furious that he claimed the Homeowners’ Exemption for a California property while having a primary residence somewhere else.
There are plenty of Californians who would like that deal in the wake of Proposition 19.
Before voters narrowly passed Prop. 19 in 2020, a principal residence and some other property could be transferred between parents and children without reassessment. This kept the property tax bill the same, protected under Proposition 13, the 1978 constitutional amendment that caps annual increases in taxable value at 2% until there is a change in ownership. In 1986, voters overwhelmingly approved Proposition 58, which excluded a parent-child transfer of a home and a limited amount of other property from the definition of “change of ownership.”
But Proposition 19 revoked that parent-child exclusion. Now only a principal residence that becomes the principal residence of an eligible family member may be excluded from reassessment, and only if the eligible family member moves in within one year and files the Homeowners’ Exemption, signed under penalty of perjury.
Ordinary Californians dealing with the death of a parent and trying to hang on to hard-earned family property do not have the luxury of claiming two principal residences. If they were to lie on a Homeowner’s Exemption form and say they had moved into a parents’ home while they were really living somewhere else, they’d be committing a crime.
And it’s unlikely that lobbyists would pour money into a legal defense fund to help them.
In July, Schiff called the mortgage fraud investigation a “baseless attempt at political retribution.” But it looks more like the Trump administration is simply holding public officials to the same standards that the government mercilessly applies to the rest of us.
They’re just not used to it, so they feel like they’re being targeted.
In New York, Attorney General Letitia James is under federal investigation for allegedly claiming multiple principal residences to get more favorable loan terms. And Federal Reserve Governor Lisa Cook was just fired by President Trump “for cause,” specifically that she, too, made false statements on a mortgage agreement.
Cook said she will not leave, and James, like Schiff, contends that the investigation is political retribution.
But it appears that some people in government have been cushioned from accountability for a very long time.
They’re not entitled to a pass, unless everybody gets one.
Write Susan@SusanShelley.com and follow her on X @Susan_Shelley
