Bill Pulte is calling on Congress to expand the authority of the Federal Housing Finance Agency (FHFA) to include enforcement powers.
According to the agency’s annual report to Congress, “FHFA believes that all federal regulators of mortgage market participants should be empowered to take action against fraud in the housing finance market. FHFA’s current authorities in this area are indirect or limited.”
Instead of continuing in its current structure of referring suspected fraud to appropriate state or federal enforcement, Pulte’s FHFA wants to do the job itself.
“To enable robust action against fraud and other financial crimes, FHFA recommends statutory amendments directing FHFA to make appropriate referrals on discovering suspected fraud (similar to referrals required by 12 U.S.C. § 4561); and authorizing FHFA to bring civil enforcement actions against persons suspected of engaging in mortgage fraud (either by granting FHFA authority to bring any action for mortgage fraud that its regulated entity could bring in federal or State court, or by creating a federal civil cause of action for mortgage fraud and granting FHFA authority to bring such actions in federal district court, similar to authority provided to the Securities and Exchange Commission for insider trading at (15 U.S.C. § 78u-1),” the report continued.
Since becoming FHFA director, Pulte has made several high-profile and highly controversial referrals of alleged mortgage fraud involving President Trump’s political opponents, including New York Attorney General Letitia James, Sen. Adam Schiff, former Rep. Eric Swalwell, and Federal Reserve Gov. Lisa Cook. Only James has faced indictment, but that was dismissed by a federal judge who declared the prosecuting attorney was inappropriately appointed by the Trump administration. Attempts to revive the indictment failed.
The FHFA is currently under investigation by the Government Accountability Office to determine if Pulte overstepped his authority in making the mortgage fraud referrals. The GAO is expected to issue its findings later this year or early next year.
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