Rooting out mortgage fraud at Fannie Mae and Freddie Mac has been one of the cornerstones of Bill Pulte’s agenda during his first two months as director of the Federal Housing Finance Agency (FHFA), which oversees the government-sponsored enterprises.
On Wednesday, the FHFA director was joined at Fannie Mae headquarters by the CEOs of Fannie and software company Palantir Technologies to announce the launch of an artificial intelligence-driven tech platform designed to automate fraud detection at the mortgage giant, which last month reported a net worth of $98.3 billion.
Priscilla Almodovar, president and CEO of Fannie Mae, said the Palantir technology will enable Fannie to “identify fraud more proactively as opposed to reactively.”
“We’re going to be able to see patterns quicker. We’re going to be able to understand the fraud and stop it in its tracks,” Almodovar said. “And I think, over time, this really becomes a deterrent for bad actors, because we’re creating friction in the system when they do bad things.”
Almodovar and Pulte said types of fraud the software will be able to detect include identifying fraudulent financial statements and flagging when a borrower lies about whether a property purchased with a mortgage will be owner-occupied. They added that the software will initially be used to examine just multifamily lending, with the potential to expand it to single-family mortgages in the future.
Pulte said the partnership with Palantir and its CEO, Alex Karp, may extend to Freddie Mac if it proves to be successful at Fannie Mae.
“We’ll see. I think [Karp] is going to find a lot of fraud. If he finds a lot of fraud, then we’ll copy and paste it over to Freddie Mac,” Pulte said.
The FHFA director, who also serves as chairman of the Fannie and Freddie boards, said he has also had talks with xAI, the artificial intelligence company founded by Elon Musk, about potential AI-based tech rollouts at the government-sponsored enterprises.
“The sky’s the limit,” Pulte said. “We’re not just limited to fraud, so if there are ways that we can pull costs out the system, we want to do it.”
