By Marisa Taylor and Chris Prentice
WASHINGTON, Oct 30 (Reuters) - A top US housing regulator led by Trump appointee Bill Pulte refused to provide records to its internal watchdog, obstructing congressionally mandated reviews of its oversight of Fannie Mae, Freddie Mac and other housing lenders, according to a report reviewed by Reuters on Friday.
The assertions escalate the Federal Housing Finance Agency's confrontation with the watchdog, and come amid broader efforts by President Donald Trump’s administration
to weaken government inspectors general whose mission is to root out waste, fraud, and mismanagement across federal agencies and departments.
The report, prepared by the FHFA's Office of Inspector General (OIG) earlier this month, alleges that the agency interfered with its independence and blocked its oversight of mortgage giants Fannie Mae and Freddie Mac.
The report called the obstruction "unprecedented."
It said the FHFA had refused to provide records and information in response to the watchdog’s requests during at least three separate evaluations, including the agency’s oversight of a lender involved in multifamily loans that had defaulted in June 2024.
The report was sent to lawmakers on Friday.
A spokesperson for the FHFA called the OIG’s allegations incorrect, saying it has "readily produced" information and cooperated with its watchdog.
For instance, the agency spokesperson said, its staff had completed 56 document requests and attended 16 separate hour-long meetings for just three recent reviews.
"FHFA is proud of its record of respecting the independence and role of the OIG and continues to do so," the spokesperson said.
The FHFA oversees the Federal Home Loan Banks as well as Fannie and Freddie, government-sponsored enterprises that have been under FHFA’s direct oversight since the 2008 financial crisis. The enterprises underpin the US housing market by backing the majority of all mortgages.
Under Pulte, however, the historically low-profile agency has become increasingly politicized. The agency has helped lead efforts to target perceived enemies of the president, including with criminal referrals of alleged mortgage fraud by Federal Reserve Governor Lisa Cook and New York Attorney General Letitia James. They have both denied wrongdoing. Pulte has defended the allegations as efforts to root out fraud in mortgage markets.
Pulte, a scion of a homebuilding empire, was a surprise pick to lead the housing regulator, but has become a trusted confidant of Trump’s.
Shortly after being confirmed as FHFA director in March 2025, Pulte took the unprecedented step of appointing himself chairman of both the Fannie and Freddie boards. He later ousted the agency's acting inspector general and drove out hundreds of employees from the regulator and the government-backed mortgage businesses.
FHFA also pulled most of the watchdog’s funding a month ago, and OIG employees have been told as much as 80% of staff, or about 80 people, would be cut, Reuters previously reported.
WATCHDOG TRIES TO STAVE OFF CUTS
James Hodge, the acting head of the OIG, told lawmakers earlier this month the watchdog office would no longer be able to do its job following FHFA's budget cuts. The FHFA has defended the cuts by saying the OIG's budget and headcount are outsized compared to those for other regulators.
Since Hodge’s warning, OIG leaders have been talking with lawmakers about ways to stave off the mass job cuts. But staff have received furlough notices and have been told to prepare for reductions, two people familiar with the matter told Reuters.
The latest report to Congress marks a shot across the bow from the acting leader at the OIG. The office, like other such watchdogs, prepares a semiannual report for Congress that typically details OIG independence.
This is the first time in at least a decade that the office has flagged an instance of FHFA interference to its independence, according to a Reuters review of the semiannual reports.
According to the report, the OIG’s general counsel tried to convince the FHFA to cooperate with its evaluations by showing documentation of its congressionally mandated responsibilities.
The OIG is "entitled to access 'all records,'" the report said.
In mid-August, the inspector general’s office appeared to reach an "understanding" with the agency as to its role, the report said. But two weeks later, FHFA notified its inspector general it was "drastically reducing" the office's funding, the report said.
"The unprecedented and abrupt cuts will prevent OIG from conducting meaningful oversight of FHFA going forward," the report said, calling them "an extreme escalation of the Agency’s challenge to the OIG’s authority and independence."
(Editing by Richard Valdmanis)
