The ranking member of the House Committee on Oversight and Government Reform has accused Federal Housing Finance Agency (FHFA) Director Bill Pulte of “abuses of power,” claiming the regulator of Fannie Mae and Freddie Mac has “politicized what has previously been a non-partisan agency that plays a critical role in providing housing finance to American taxpayers.”
In a letter addressed to Pulte, U.S. Rep. Robert Garcia, D-Calif., raised questions about why the FHFA head took the “unprecedented step” of making a series of high-profile mortgage fraud referrals to the Department of Justice, rather than handing off his concerns to the FHFA’s Office of Inspector General, which typically handles DOJ criminal referrals.
“This alarming practice raises serious concerns that you manufactured allegations which would not withstand scrutiny from an independent and fair process,” Garcia wrote.
Public figures criminally referred to the DOJ by Pulte include New York Attorney General Letitia James; Sen. Adam Schiff, D-Calif.; and Federal Reserve Governor Lisa Cook.
James was indicted by a grand jury on mortgage fraud charges in October. On Monday, a federal judge dismissed the case against James, deeming the appointment of President Donald Trump’s former personal attorney, Lindsey Halligan, as interim U.S. attorney to pursue the indictment as “invalid.” The case was dismissed “without prejudice,” meaning the underlying allegations against James can still be brought forward in new proceedings.
The Justice Department has opened investigations into the allegations against Schiff and Cook, though no indictments have been handed down.
Trump moved to fire Cook based on Pulte’s mortgage fraud referral, but she remains in her role at the central bank following favorable court rulings. The Supreme Court is set to hear oral arguments on the matter in January.
‘Weaponization of the government’
In late October, Pulte announced targeted jobs cuts at Fannie Mae, the government-sponsored mortgage investor that alongside Freddie Mac and the Federal Home Loan Bank System is regulated by the FHFA. Pulte described it as a “standard business layoff.”
Up to a dozen of the roughly 60 employees terminated worked within Fannie Mae’s ethics and internal auditing and investigations offices, according to The Wall Street Journal.
“We, like any business,” said Pulte in an Oct. 30 post on X, “must eliminate positions that are not core, or otherwise, to mortgages and new home sales.”
The ousting of FHFA Acting Inspector General John “Joe” Allen just days later came amid reporting by the Journal that departing compliance officials had been investigating how Pulte acquired mortgage records for prominent Democratic officials, including his handling of the criminal referral process.
Garcia’s letter references an article published Nov. 10 by The Washington Post, which reported that Pulte allegedly fired internal watchdogs at Fannie Mae who were looking into multiple complaints against a “high-ranking company officer close to him,” citing anonymous sources familiar with the matter.
“These efforts to degrade independent oversight of your agency threaten FHFA’s ability to serve the American public,” Garcia wrote, “and will further enable your weaponization of the government against President Trump’s opponents.”
Accusations that Pulte has weaponized the FHFA against Trump’s perceived political opponents were also cited by the lawyer representing Cook in her defense against allegations of mortgage fraud.
Pulte’s selective and public enforcement of supposed mortgage infractions “gives rise to the unmistakable impression that he has been improperly coordinating with the White House to manufacture flimsy predicates to launch these probes,” wrote attorney Abbe Lowell in a recent letter to Attorney General Pam Bondi, formally denouncing the allegations.
Pulte criminally referred Cook to the DOJ in August, citing internal findings that Cook had allegedly claimed homes in two states as her primary residence.
The internal findings were initially aired on social media by Pulte, prompting Trump’s move to fire Cook from the Federal Reserve on Aug. 25.
Anonymous tips
How Pulte procures “tips” of alleged mortgage fraud was the focus of a letter sent in early September to the FHFA director by Rep. Jamie Raskin, D-Md., the ranking member of the House Judiciary Committee.
In a phone interview with CNBC on Aug. 20, Pulte said the FHFA received a tip that led to the agency probe of Cook, declining to elaborate on the origin of the tip and publicly pronouncing his approach to mortgage law enforcement as being apolitical.
“We will look at any allegation of mortgage fraud, and we do not care whether you’re a Republican [or] a Democrat,” Pulte said. “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.”
Fannie Mae and the software company Palantir Technologies announced a widely publicized partnership in May, launching an artificial intelligence-driven tech platform to automate fraud detection at the mortgage giant. The software is specifically designed to detect fraudulent financial statements and flag when borrowers have potentially lied about occupancy status on mortgage applications.
Raskin alleged that Pulte used FHFA resources to “conduct deep-sea fishing expeditions of Americans’ personal financial information, apparently with help from Peter Thiel’s data company, Palantir.”
“While it is unclear exactly who ordered these specific records to be pulled, and on what basis,” Raskin wrote, “the roster of the individuals you have chosen to target and publicly refer to DOJ inescapably suggests that your overarching purpose is to punish and smear critics of President Trump.”
The FHFA has not responded to Scotsman Guide’s requests for comment.
