Pulte's housing agency obstructed watchdog, internal report says

what happened

The Federal Housing Finance Agency, led by Trump appointee Bill Pulte, declined to hand over records to its internal watchdog, Reuters reports, citing a report it reviewed. According to the watchdog's findings, these refusals interfered with oversight of Fannie Mae, Freddie Mac and other housing lenders.

The report, prepared by the FHFA's Office of Inspector General earlier this month, says the agency withheld documents and information in at least three separate evaluations. The authors called the obstruction unprecedented. An FHFA spokesperson rejected the allegations as incorrect, saying the agency cooperated with its watchdog and completed 56 document requests and 16 meetings for three recent reviews.

Meanwhile, the FHFA has pulled most of the watchdog's funding, and staff were told that up to 80% of positions could be cut. Acting inspector general James Hodge warned lawmakers that the office would no longer be able to do its job.

why it matters

Fannie Mae and Freddie Mac back a large share of US mortgages, so doubts about the quality of their oversight matter to investors in their shares and to lenders. The dispute could shape expectations about the companies' future, but the report itself does not change their financial results.

market impact

Fannie Mae and Freddie Mac: the clash with their regulator adds uncertainty for the mortgage giants

tags

instruments