Watchdogs at the government-sponsored home loan company popularly known as Fannie Mae were fired as they investigated whether a close ally of President Donald Trump improperly accessed mortgage files of Democratic officials targeted for political retribution by the president, the Wall Street Journal reported Tuesday.
People familiar with the matter told the Journal that the fired ethics team members were looking into complaints that Federal Housing Finance Agency (FHFA) Director Bill Pulte and his team improperly directed staff to access mortgage records of New York Attorney General Letitia James and other Democratic officials.
The anonymous officials said that ethics team leader Suzanne Libby and her staffers were fired shortly after Fannie Mae management ordered them to stop investigating a company executive close to Pulte, effectively clearing out the company’s internal watchdogs.
This, days after Reuters reported that Joe Allen, the FHFA’s acting inspector-general, was being removed from his position. Three unnamed sources told Reuters that Allen’s removal came as he was preparing to notify congressional lawmakers that the FHFA was not cooperating with his office.
Pulte has donated hundreds of thousands of dollars to a pro-Trump super political action committee and has been described as the president’s “attack dog” after his team pulled property records of Democrats including James, Sen. Adam Schiff of California, and Federal Reserve Gov. Lisa Cook.
James successfully sued Trump and his business organization for fraud. Schiff was the lead manager in the first of the president’s two House impeachments.
Interim US Attorney for the Eastern District of Virginia Lindsey Halligan—who was hand-picked by Trump—indicted James after her predecessor, Erik Seibert, refused to do so, citing a lack of evidence. On Tuesday, the Campaign for Accountability, a watchdog group, filed a complaint with the bar associations of Florida and Virginia accusing Halligan of possible ethics violations in connection with the charges against James and former FBI Director James Comey, who oversaw a probe into alleged pro-Trump interference in the 2016 presidential election by Russia.
Pulte said last month that he fired dozens of Fannie Mae staffers as part of the Trump administration’s attack on diversity, equity, and inclusion initiatives. On Monday, the company fired at least 200 additional employees, according to the Washington Post.
As the Post noted:
Pulte’s actions and unpredictable policymaking style have also sown uncertainty and undermined confidence in him from those across the housing finance industry at a crucial moment. The Trump administration is looking to take Fannie and Freddie [Mac]—under government control since the 2008 housing crisis—public through what it says would be the largest public offering in history. Pulling that off would require a full-throated endorsement from major banks, investors, lenders, and the financial markets. But multiple industry figures and housing finance experts say Pulte’s time in office, and the recent firings of top Fannie officials, is eroding their faith in the firms’ futures.
If Pulte or others are found to have improperly accessed mortgage records, they could possibly face charges under the Computer Fraud and Abuse Act, which prohibits intentionally accessing electronic files without authorization or exceeding authorized access, especially for protected computers including those handling financial data at Fannie Mae.
News of the ethics team firings came as Fannie Mae is under scrutiny for announcing its lifting of the 620 minimum credit score requirement for borrowers seeking loans that will be sold to the company, and as Trump and Pulte float the possibility of 50-year residential mortgages. Critics point to the 2008-09 financial crash—caused largely by a real estate bubble fueled by risky lending practices—and the possibility of lifelong indebtedness resulting from such lengthy loans as cause for alarm.
Pulte is an heir to the fortune amassed by his grandfather, Pulte Homes founder William J. Pulte. The company, now known as PulteGroup, is currently the nation’s third-largest homebuilder.
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