Lawmakers ask FHFA watchdog to review Pulte’s DOJ referral of Fed governor

24 U.S. representatives question if the housing agency’s OIG was consulted prior to Lisa Cook’s criminal referral

Lawmakers ask FHFA watchdog to review Pulte’s DOJ referral of Fed governor

24 U.S. representatives question if the housing agency’s OIG was consulted prior to Lisa Cook’s criminal referral
Democrats urge FHFA OIG to probe Director Pulte’s criminal referral of Fed Governor Cook, citing concerns over process.

A group of Democratic lawmakers has asked a federal watchdog to review the process that led to Federal Housing Finance Agency (FHFA) Director Bill Pulte’s criminal referral of Federal Reserve Governor Lisa Cook for alleged mortgage fraud.

In a letter to John “Joe” Allen, the acting head of the FHFA Office of Inspector General (OIG), the 24 U.S. representatives — led by Maxine Waters, the ranking Democratic member of the House Committee on Financial Services — expressed concerns over whether the FHFA “and in particular Director Pulte has complied with all applicable federal and agency statutes, regulations, policies, and procedures during its acquisition, review, and/or public release of any document related to Governor Dr. Lisa Cook’s mortgage applications and any other mortgage related documents.”

On Aug. 15, Pulte sent a letter to Department of Justice officials alleging Cook fraudulently claimed two homes as her primary residence to potentially obtain more favorable mortgage rates. She then allegedly received investment income by renting out one of the properties, according to Pulte.

Ten days later, President Donald Trump moved to fire Cook based on the claims in Pulte’s letter to the DOJ. Cook then sued to keep her position on the Fed’s board. On Tuesday, a federal judge ruled in Cook’s favor, granting a temporary restraining order that allows her to continue serving on the Fed’s board and its rate-making committee while her case proceeds. Trump’s attorneys have appealed that ruling.

Rep. Waters’ letter to the inspector general obtained by Scotsman Guide poses a series of questions about whether Pulte followed the agency’s typical procedures for criminal referrals. It also asks how Cook’s real estate transactions came to the attention of the FHFA and how the specific information related to her mortgage documents was acquired.

The Democratic lawmakers are requesting that the inspector general “review all the circumstances and activities related to the FHFA’s acquisition and review of Governor Dr. Cook’s mortgage applications as well as any announcements, statements, and release of documents related to this matter in order to determine whether any statutory, regulatory, or agency policies may have been violated.”

In a phone interview with CNBC on Aug. 20, Pulte said the FHFA received a tip that led to the agency’s probe of Cook, though he declined to elaborate on where the tip originated from.

Earlier this week, Rep. Jamie Raskin, D-Md., sent a letter directly to Pulte that questioned why the DOJ referral came from him personally instead of the FHFA’s Office of Inspector General.

“Although standard procedure for a FHFA fraud referral is for FHFA’s Inspector General to transmit these sensitive allegations confidentially to DOJ, you not only made these referrals to DOJ personally, but aggressively publicized them,” Raskin’s letter stated, referring to Pulte’s frequent social media posts about the Cook matter.

Waters’ letter poses similar procedural questions to Allen, the OIG head, asking whether his office participated in the review process prior to the DOJ referral.

“If so, what activities did it perform and has your office assessed and determined whether it complied with all applicable federal and agency statutes, regulations, and procedures regarding such activities?” the letter asks.

Neither the FHFA nor the agency’s OIG immediately responded to Scotsman Guide’s requests for comment.

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