Texas AG under scrutiny for potential mortgage fraud

Texas Attorney General Ken Paxton and his wife, Angela — who own three homes in Texas — are facing similar accusations of mortgage fraud as the ones President Donald Trump levied against Sen. Adam Schiff of California and New York AG Letitia James.

According to records assessed by The Associated Press (AP), mortgages signed by the Paxtons contained inaccurate statements declaring that each of the three houses — one in suburban Dallas, two in Austin — were their primary residence.

This allowed the now-estranged couple to improperly lock in low interest rates. The lower rates would have saved the Paxtons tens of thousands of dollars in payments over the life of the loans, according to the AP.

The records reviewed by the AP also show the Paxtons improperly claimed homestead tax exemptions on two properties at the same time and have repeatedly violated lending terms on other homes. A homestead tax break is a property tax reduction that a homeowner is only eligible to collect on one property that is also their primary home.

Knowingly lying on mortgage documents or claiming multiple homestead tax breaks is illegal, and violating loan terms can lead lenders to demand full repayment.

Mortgage fraud has become a political pawn and an aggressive target of the second Trump administration through the Federal Housing Finance Agency (FHFA).

The mortgage controversy could fuel attacks in the Republican primary races as Paxton challenges John Cornyn for a U.S. Senate seat next year. And Trump has simultaneously attempted to prosecute Democrats like James and Schiff over comparable allegations.

Paxton, a Trump ally, has publicly called for James to be held accountable, but legal experts say it’s unlikely he’ll face a similar investigation either federally or in Texas.

James’ lawyer, Abbe Lowell, argued that Paxton should be the focus instead, telling the AP that the allegations against James are “baseless.” Schiff’s team also dismissed the referral as political, noting that he sought legal guidance and disclosed his second home to lenders.

Neither the Department of Justice nor the FHFA has said whether they’ll investigate Paxton, according to the AP.

Separately, land records evaluated by the AP indicate the Paxtons may have violated the terms of mortgages on the other houses they own.

The mortgage on a home in College Station, Texas, says the property is for the Paxtons’ exclusive use and cannot be rented out. Doing so would result in the mortgage being terminated, the document states. But the home has been listed for rent on real estate websites on and off since at least 2022, the outlet stated.

Prior legal trouble

Paxton has also faced legal trouble before regarding his conduct in office. Before he was elected attorney general, Paxton, then a state senator, admitted in 2014 to violating Texas securities law. He paid a fine as a result.

Paxton spent nearly a decade under state indictment for securities fraud while serving as AG before the charges were dropped in 2024. Separate allegations of misconduct led to his impeachment by the Texas House in 2023, although he was later acquitted by the Senate.

The impeachment was largely driven by Paxton’s ties to Austin developer Nate Paul, who pleaded guilty in 2025 to making a false statement to a financial institution. In 2020, Paxton’s aides reported concerns to the FBI that he was abusing his office to benefit Paul, such as intervening in lawsuits and issuing favorable legal opinions.

House impeachment managers also accused Paxton of helping Paul in exchange for favors, including home renovations paid for by Paul on the same home that Paxton falsely claimed as his third primary residence.