For a second time in a week, a federal grand jury in Virginia has refused to indict New York Attorney General Letitia James for alleged mortgage fraud, sources said, again rejecting the Department of Justice's attempt to refile the case after a federal judge dismissed an earlier case based on the unlawful appointment of the U.S. attorney in the Eastern District of Virginia.

Federal prosecutors on Thursday failed to convince a majority of grand jurors to approve charges that James misled a bank to obtain favorable loan terms on a home mortgage, according to sources.