The Federal Housing Finance Agency has asked Congress for statutory authority to bring enforcement actions for mortgage fraud, according to the agency’s annual report.
The report, which was released this week, recommended that FHFA be given new powers that it says will “enable robust action against fraud and other financial crimes.”
In the report, the FHFA asks either for the authority to bring mortgage fraud actions in federal or state courts or for Congress to create a federal civil cause of action to prosecute these cases, according to Realtor.com.
“FHFA believes that all federal regulators of mortgage market participants should be empowered to take action against fraud in the housing finance market,” the report reads. “FHFA’s current authorities in this area are indirect or limited.”
The request aligns with a broader push by the Trump administration to root out fraud, Realtor.com noted.
Fraud Investigations
Director Bill Pulte, who has led FHFA since early 2025, has championed several prominent mortgage fraud investigations. Democrats have castigated those investigations as a politicization of the FHFA.
The FHFA didn’t respond to a request for further details on the requested authority, Realtor.com noted.
FHFA said it gets tips on suspected mortgage fraud from its regulated entities—the 11 Federal Home Loan Banks, Fannie Mae, and Freddie Mac. It currently can pass those tips along to state or federal regulatory enforcement authorities.
The agency also can issue suspension orders to ban convicted fraudsters from doing business with it or a regulated entity.
Root Out Fraud
FHFA said that the ability to bring disputes directly is necessary to root out fraud, stating that its current legal enforcement remedies are limited.
“In limited circumstances, FHFA may bring an enforcement action against a contractual counterparty who fails to ensure the eligibility of loans delivered or pledged,” the agency said.
Realtor.com reported that the first option, which would allow the agency “to bring any action for mortgage fraud that its regulated entity could bring in federal or State court,” is similar to the IRS’ ability to launch lawsuits against people for longstanding, unpaid taxes.
The latter option, “creating a federal civil cause of action for mortgage fraud and granting FHFA authority to bring such actions in federal district court,” could take a similar form to the authority that the Securities and Exchange Commission has to impose civil penalties on people for insider trading, CNBC said.
Also, the FHFA said in the report that it wants more authority to examine third-party service providers. The Democrats have been widely critical of Pulte in his leadership of FHFA. Especially as he pushed investigations of Fed board member Lisa Cook and Sen. Adam Schiff (D-California) related to mortgage fraud.
Neither of those investigations has yet led to any criminal charges.
