On April 8, 2025, the Federal Housing Finance Agency (FHFA) and Fannie Mae made headlines by announcing the dismissal of over 100 employees due to unethical conduct, including acts of fraud. This action is part of a broader effort by the FHFA to ensure integrity within the housing finance sector, particularly under the leadership of William J. Pulte, the newly appointed director of the FHFA.
In a statement reflecting the seriousness of the situation, Pulte said, "In President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry." He emphasized the commitment of the FHFA to uphold ethical standards, noting, "Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company. Anyone who commits fraud against Fannie Mae does so against the American people." This strong stance highlights the administration's zero-tolerance policy toward unethical behavior in the housing market.
The firings come on the heels of significant layoffs at Fannie Mae, where 700 employees were let go in late March 2025. These layoffs were attributed to ethical violations linked to the misuse of the company’s Matching Grants Program, which allows employees to donate to charitable organizations with matching contributions from the company. Reports indicate that some employees conspired to exploit this program, resulting in millions of dollars being misappropriated over several years.
Priscilla Almodovar, President and CEO of Fannie Mae, expressed gratitude towards Pulte for his decisive actions against unethical conduct. She stated, "We hold our employees to the highest standards, and we will continue to do so." This sentiment reflects a commitment to restoring trust and accountability within the organization.
In a recent filing with the Securities and Exchange Commission (SEC) for the third quarter of 2024, Fannie Mae reported experiencing financial losses tied to mortgage fraud. The filing revealed that the organization was investigating multifamily lending transactions where fraud was suspected. Fannie Mae acknowledged that "certain gaps have been identified in our processes for managing multifamily loan origination fraud risk and for overseeing our multifamily seller/servicer counterparties." The report cautioned that the company might face additional financial losses due to these fraud risks in the future.
Among the 700 employees laid off, reports from Techstory indicated that 200 were Telugu workers, raising concerns about the impact of these layoffs on specific communities. The allegations of misuse of the Matching Grants Program have prompted scrutiny and further investigation into the ethical practices at Fannie Mae.
The dismissals at Fannie Mae are not isolated incidents but are part of a larger trend under the Trump administration, which has been consolidating and winding down agencies overseeing the nation’s housing market. Recently, the Consumer Financial Protection Bureau (CFPB) managed to avoid being shut down after a U.S. District Judge ruled against the administration's attempts to terminate Bureau employees. This ruling mandated the reinstatement of previously terminated workers, highlighting ongoing tensions between regulatory agencies and the current administration.
Furthermore, the Trump administration had allegedly planned to eliminate nearly 1,200 workers from the CFPB, which has an approximate staff of 1,700. Reports indicated that several employees were informed that the Bureau would be "wound down," leaving only five employees to handle essential operations.
In a related development, Pulte has been active on social media, particularly on X, where he announced that the FHFA had reduced its workforce by 25%. His posts indicated a commitment to consolidating divisions to focus on building more homes and enhancing the safety and soundness of the housing market. On April 8, he tweeted, "We exceeded DOGE's expectations at U.S. Federal Housing (FHFA), with an over 25% reduction in the Agency’s active workforce." This statement reflects his aggressive approach to restructuring the agency.
Since his confirmation on March 21, 2025, Pulte has been swift in implementing changes at the FHFA. He has posted 12 orders that rescind Biden-era actions, signaling a shift in policy direction. In his efforts to streamline operations, Pulte claimed to have eradicated $9 million in diversity, equity, and inclusion spending at Freddie Mac, as well as $6.4 million in similar spending at Fannie Mae. He also hinted at career opportunities for GSE employees as they return to the office.
In a Fox News appearance last month, Pulte claimed that only a small fraction of the 2,900 Fannie Mae employees were working in the office, further emphasizing the need for a return to normalcy in operations. He has also claimed to cut several regulations from the Obama and Biden administrations that he argues were detrimental to housing affordability, although he has not provided specific details regarding these cuts.
The actions taken by the FHFA and Fannie Mae raise significant questions about the future of the housing market and the ethical standards within it. As the agency continues to navigate these challenges, stakeholders are closely watching how these developments will impact the broader housing finance landscape.
With the ongoing investigations into fraud and the recent layoffs, the FHFA and Fannie Mae are under pressure to restore public trust and demonstrate their commitment to ethical practices. The outcome of these efforts will be crucial in shaping the future of housing finance in America.
