Fannie Mae has announced a partnership with artificial intelligence (AI) platform Palantir to launch a Crime Detection Unit in an effort to enhance the GSE’s fraud detection capabilities. The partnership is projected to save the U.S. housing market millions in future fraud losses.
Denver, Colorado-based Palantir designs and deploys AI and machine learning (ML) technology used by government agencies and commercial clients. The company’s offerings provides expansive monitoring for anomalous transactions, activities, and behaviors to help companies detect suspicious activity and trigger investigative action.
In a Wednesday morning press conference at Fannie Mae’s D.C. headquarters, Fannie Mae Chair and Federal Housing Finance Agency (FHFA) Director William J. Pulte was joined by Priscilla Almodovar, Fannie Mae’s President and CEO; and Alex Karp, Co-Founder and CEO of Palantir Technologies in announcing the new partnership.
“No one is above the law. In partnership with Palantir, Fannie Mae’s Crime Detection Unit will increase safety and soundness by rooting out bad actors in our housing system. This cutting-edge AI technology will help us find criminals who try to defraud our system,” said Pulte.
Fannie Mae currently has more than $4.3 trillion in assets and plays a foundational role in the U.S. housing market. The company is the largest holder of residential mortgage debt outstanding in the country, owning, or guaranteeing an estimated one in four single-family mortgages and 20% of multifamily mortgages in the U.S.
“I think we are going to find a lot of occupancy fraud,” said Pulte. This type of fraud occurs when the borrower says that they will occupy the property, but have no intention of doing so.
“By integrating this leading AI technology, we will look across millions of datasets to detect patterns that were previously undetectable,” said Almodovar. “This new partnership will combat mortgage fraud, helping to safeguard the U.S. mortgage market for lenders, homebuyers, and taxpayers.”
In its rollout, Almodovar noted there would be an emphasis on uncovering fraud in Fannie Mae’s multifamily loans over single-family loans. In a recent annual report, Fannie Mae disclosed that fraudulent or potentially fraudulent transactions contributed to the GSE setting aside $752 million for multifamily lending credit losses in 2024.
Fannie Mae’s AI partnership is the latest in federal actions to stamp out mortgage fraud as Consumer Financial Protection Bureau (CFPB) Chief Legal Officer Mark Paoletta recently outlined how the agency will channel its focus on “tangible harm to consumers” by reallocating resources from enforcement and supervision activities that can be done by states.
A recent memo from Paoletta stated that the Bureau will turn its attention to mortgage fraud its “highest priority,” followed by Fair Credit Reporting Act (FCRA)/Regulation V data furnishing violations; Fair Debt Collection Practices Act (FDCPA)/Regulation F violations relating to consumer contracts/debts; various fraudulent overcharges, fees, etc.; and the protection of consumer info resulting in actual loss to consumers.
Palantir currently has contracts with the U.S. Army, Air Force, Space Force, and Navy for its Maven Smart System software licenses.
Karp said, “This partnership with Fannie Mae will set off a revolution in how we combat mortgage fraud in this country. We are bringing the fight directly to anyone who attempts to defraud our mortgage system and exploit hardworking Americans.”
In highlighting the speed in which Palantir’s tech will detect fraud issues in mortgage applications, Karp noted the time savings in stating, “10 seconds vs. two months” in efficiency.
