WASHINGTON — Texas Attorney General Ken Paxton and his wife, Angela, are longtime owners of a $1.5 million house in a gated community outside Dallas. In 2015, they snapped up a second home in Austin. Then another.
The problem: Mortgages signed by the Paxtons contained inaccurate statements declaring that each of those three houses was their primary residence, enabling the now-estranged couple to improperly lock in low interest rates, according to an Associated Press review of public records. The lower rates will save the Paxtons tens of thousands of dollars in payments over the life of the loan, legal experts say.
The records also revealed that the Paxtons collected an impermissible homestead tax break on two of those homes, and they have routinely flouted lending agreements on some of their other properties.
It is a federal and state crime to knowingly make false statements on mortgage documents. It’s also against the law in Texas to collect a homestead tax break on two separate properties. Violating the terms of a mortgage could allow lenders recourse to seek full payment of a loan, according to legal experts.
The mortgage revelations are likely to become fodder in the Republican primary for a U.S. Senate seat in which Paxton is seeking to topple the incumbent, John Cornyn. The situation is further complicated by the Trump administration’s criminal pursuit of Democrats over similar issues.
President Donald Trump has accused two of his political foes — Sen. Adam Schiff of California and New York Attorney General Letitia James — of committing mortgage fraud, though legal experts say the circumstances are less serious.
The Democrats have long been objects of Trump’s ire for having led various investigations into his conduct as president and as a business executive.
Paxton, himself, has weighed in on the investigation of James, saying he hoped authorities would look into her conduct. “I hope that if she’s done something wrong, I hope that she’s actually held accountable,” he told supporters last month.
The Justice Department has launched a criminal investigation of James, FBI director Kash Patel told Fox News in May. The department received a criminal referral for Schiff last week from the Federal Housing Finance Agency, its director William Pulte confirmed in a social media post.
Neither the Justice Department nor the FHFA responded to an inquiry about whether they may investigate Paxton, too.
James’ attorney, Abbe Lowell, urged the Trump administration to investigate Paxton instead.
“If this administration was genuinely interested in rooting out fraud, it appears they should stop wasting their time on the baseless and discredited allegations against the New York Attorney General James and turn their attention to Texas,” said Lowell, a prominent Washington attorney whose past clients include Hunter Biden, Ivanka Trump and Jared Kushner.
In a statement, Marisol Samayoa, a Schiff spokeswoman, blasted the criminal referral as “a transparent attempt” by Trump “to punish a perceived political foe who is committed to holding him to account.” She added that Schiff disclosed to his lenders that he owned another home that was a principal residence and sought guidance from an attorney.
It is unlikely that Paxton, a staunch Trump ally, will face the same federal scrutiny as James and Schiff. It’s equally doubtful that Paxton will face much legal trouble in Texas: His office is one of the primary agencies tasked with investigating allegations of mortgage fraud.
Ken Paxton and his spokesman did not respond to multiple requests for comment. Angela Paxton, who is a state senator in Texas, did not respond to requests made through her office.
Documents reviewed by the AP show the Paxtons hold mortgages on three homes — one in suburban Dallas, two in Austin — that are each listed as their primary residence. The designation comes with a considerable financial upside.
Interest rates on primary homes are significantly lower than those for mortgages on secondary homes or investmen