An Associated Press report says that senior Fannie Mae officials who questioned the conduct of Lauren Smith, Head of Marketing, were all forced out of their jobs late last month, along with internal ethics watchdogs who were investigating Federal Housing Finance Agency (FHFA) Director Bill Pulte and his allies.
The news agency reported that an email it reviewed showed that GSE executives were disturbed by one executive called the “very problematic” disclosure of data by Smith, who was acting on behalf of Pulte.
Mallory Evans, Fannie Mae’s SVP in charge of the Mortgage division reportedly said in an email: “Lauren, the information that was provided to Freddie Mac in this email is a problem. That is confidential, competitive information.”
According to the AP, Evans requested that the GSE’s top attorney weigh in on the matter, and also copied Fannie Mae’s CEO, Priscilla Almodovar, on the email.
Criticism & Blowback
According to the AP’s report, Sen. Elizabeth Warren, (D-Mass,) the ranking Democrat on the Senate Banking Committee, said, “This is another example of Bill Pulte weaponizing his role to do Donald Trump’s bidding, instead of working to lower costs amidst a housing crisis. His behavior raises significant questions, and he needs to be brought in front of Congress to answer them.”
In June, Pulte ordered Fannie Mae and Freddie Mac to prepare a proposal for the firms to accept cryptocurrency, another industry Trump has boosted, as part of the criteria for buying mortgages from banks. Last week, he persuaded Trump about the allure of a 50-year mortgage as a way to increase home buying and building—a proposal that was widely criticized because it would drastically increase the overall price of a loan.
“The recent dismissal of top Fannie Mae executives for releasing confidential mortgage pricing data to Freddie Mac has shook the markets and raise serious questions of risk-management and transparency in this system,” added Ben Mizes, Clever Offers’ President and Co-Founder. “The lesson for mortgage borrowers and lenders is clear: When one of the two institutions that support roughly half of residential mortgage originations in the United States (through Fannie/Freddie) exhibit internal instability, there can be broad impacts that raise refinancing costs, tighten liquidity and restrict credit availability for typical homebuyers.”
Editor’s note: MortgagePoint requested comment from FHFA, Fannie Mae, and Freddie Mac. No response was received as of this posting. We will update the story if and when those responses are received.
