A sweeping shake-up inside Fannie Mae has ignited concerns of political retaliation and interference after a group of ethics and internal investigations officials—some of the agency’s most senior watchdogs—were abruptly forced out.
The ethics chiefs were fired while examining whether Trump allies accessed mortgage records belonging to New York Attorney General Letitia James and other prominent Democrats.
The removals, which included the agency’s chief ethics officer, its general counsel, and the acting inspector general, have widened alarm among legal experts who say the events point to an extraordinary breakdown of red lines designed to protect sensitive financial data from political abuse.
At the center of the controversy: William Pulte, the Federal Housing Finance Agency (FHFA) leader and vocal Trump supporter, who in recent months has accused James, Rep. Adam Schiff, and Federal Reserve Governor Lisa Cook of mortgage fraud.
All have denied the claims. Analysts say the accusations bear the markings of politically motivated referrals—especially given the timing and the individuals targeted, all of whom have clashed publicly with the former president.
Sensitive Records, Unusual Channels
Mortgage files contain deeply personal financial information rarely accessed without strict legal protocols. And investigations into mortgage fraud almost never originate from an agency’s inspector general; they typically begin with law enforcement or financial regulators.
Experts quoted by The Guardian say it is “highly unusual” for the FHFA inspector general’s office to be involved at all—let alone to be handed sensitive records by senior officials after politically charged accusations.
Inside Fannie Mae, employees reportedly filed internal complaints claiming that top FHFA officials ordered staff to pull the mortgage records of James and others. Ethics officers referred the matter to the inspector general, who then escalated it to the U.S. attorney’s office in the Eastern District of Virginia.
But that office is now run by Lindsey Halligan—a Trump-aligned appointee who, sources say, was displeased to receive a matter that could become discoverable by James’s legal team. One source claims Halligan forwarded the information to the White House, though she denies the allegation, calling it “false.”
The FHFA, for its part, has dismissed concerns as partisan.
“This is more Fake News from people who are trying to impede the criminal justice system,” a spokesperson said.
A Purge Behind Closed Doors
The firings came swiftly.
Acting Inspector General Joe Allen was asked to step down, leaving the watchdog office effectively leaderless. About a dozen ethics and internal investigations officials—people whose jobs exist to prevent misuse of power—were fired or resigned under pressure. Among them were Chief Ethics Officer Suzanne Libby and General Counsel Danielle McCoy, both central to the probe.
Pulte has publicly insisted the departures stem from his effort to dismantle diversity, equity, and inclusion (DEI) programs. But former officials say that explanation strains credibility, noting that the firings targeted individuals directly involved in reviewing whether Pulte himself gained improper access to protected data.
The timing, they say, “speaks for itself.”
A Worrying Pattern?
The episode adds to a growing list of moments where federal agencies, now helmed by Trump allies, appear to blur the line between legitimate investigative authority and political score-settling.
Letitia James—whose office won a $454 million civil fraud judgment against Trump earlier this year—has long been a political target of the former president. Attempts to access her mortgage records, if proven, would represent a stunning breach of privacy and a misuse of government power.
The stakes are no less high for Schiff, a frequent Trump critic, and Lisa Cook, one of the Federal Reserve’s most prominent economists.
For now, the actions of the FHFA and Fannie Mae leadership have left a vacuum where guardrails once stood. Without transparency, watchdogs warn, there is a growing risk that the nation’s housing finance system—typically insulated from partisan warfare—could become another front in it.
As one former federal ethics lawyer put it:
“When the people charged with protecting the system are the ones being removed, that’s when you worry the most.”
