A government watchdog agency has launched an investigation into Federal Housing Finance Agency (FHFA) Director Bill Pulte’s handling of a series of high-profile mortgage fraud referrals.
A spokesperson for the U.S. Government Accountability Office (GAO) confirmed the probe, which is based on a request sent Nov. 17 by eight Democratic U.S. senators, led by Elizabeth Warren of Massachusetts.
“I can confirm that GAO has accepted this request following our standard process,” the spokesperson wrote in an email to Scotsman Guide. “The first thing GAO does as any work begins is to determine the full scope of what we will cover and the methodology to be used. This can take a few months, and until that is done, we cannot provide any estimates on a completion date.”
The GAO’s managing director of congressional relations, A. Nicole Clowers, noted in a formal response to the senators that the GAO would “review matters relating to recent actions undertaken at the Federal Housing Finance Agency (FHFA), to determine whether the agency and its employees misused federal authority and resources.”
The senators’ letter to the government watchdog raises concerns over Pulte’s handling of criminal referrals to the Department of Justice (DOJ).
Specifically, the senators questioned whether the FHFA director followed proper procedure when he made formal allegations of mortgage fraud against New York Attorney General Letitia James; Sen. Adam Schiff, D-Calif., Federal Reserve Governor Lisa Cook; and Rep. Eric Swalwell, D-Calif.
The letter asks why Pulte personally made the criminal referrals instead of relaying his concerns to his agency’s Office of Inspector General, an internal watchdog that historically has been tasked with FHFA-initiated referrals to the DOJ.
“Mr. Pulte’s actions demand scrutiny,” the senators wrote. “It is unclear why Pulte made these claims, how he accessed the information as Director to make such claims, and whether and how official FHFA resources — staff time, government communications systems, or privileged data — were used to do so.”
The senators also questioned whether Pulte’s disclosure of personal financial records constituted a violation of the Privacy Act of 1974.
The potential breach of privacy laws formed the basis of a civil complaint Swalwell made on Nov. 25 against Pulte, in which the U.S. representative alleged that the FHFA director “abused his position by scouring databases at Fannie Mae and Freddie Mac — two government-sponsored enterprises — for the private mortgage records of several prominent Democrats,” including Swalwell.
No indictments have been brought by the DOJ to date against Schiff, Cook or Swalwell based on the criminal referrals, though James was indicted by a grand jury in October.
That case was dismissed by a federal judge, however, who ruled that the appointment of President Donald Trump’s former personal attorney, Lindsey Halligan, as interim U.S. attorney to pursue the indictment was “invalid.”
The senators’ letter suggests there may have been political motivation behind the mortgage fraud referrals.
“Mr. Pulte, notably, is reportedly in contact with President Trump regarding his mortgage fraud investigations — creating a clear path through which Mr. Pulte could be working with the President to identify and execute on mortgage fraud investigation targets,” the letter stated.
Pulte has publicly claimed that his DOJ referrals have been nonpartisan.
“We will look at any allegation of mortgage fraud, and we do not care whether you’re a Republican [or] a Democrat,” Pulte said during an Aug. 20 phone interview with CNBC. “We do not care whether you’re wealthy, we don’t care whether you’re a prosecutor, we don’t care whether you’re a Fed governor.”
