Trump Administration Fires Mortgage Regulator Watchdog and Fannie Mae Ethics Staff

The internal watchdog at the Federal Housing Finance Agency has reportedly been fired, after layoffs at the FHFA-controlled mortgage giant Fannie Mae hit staff on the ethics and internal investigations unit.

The shakeups come after FHFA Director Bill Pulte publicized his criminal referrals over allegations of mortgage fraud against a number of President Donald Trump's foes, including New York Attorney General Letitia James, Federal Reserve Gov. Lisa Cook, and U.S. Sen. Adam Schiff (D-CA).

FHFA's acting Inspector General Joe Allen received a termination notice from the White House after he made efforts to provide information to federal prosecutors in Virginia, according to Reuters, which first reported the firing.

Lindsey Halligan, the interim U.S. attorney for the Eastern District of Virginia, is currently prosecuting James over the mortgage fraud allegations raised by Pulte. James has pleaded not guilty in the case.

Sources told Reuters that Allen was fired after he tried to provide key information to prosecutors in that office, with the information described as constitutionally required and potentially relevant for discovery.

Allen was also preparing to send a letter to Congress notifying lawmakers that the FHFA was not cooperating with the inspector general’s office, sources told Reuters.

Allen was appointed FHFA’s acting inspector general in April 2025 after working for 40 years at the Justice Department, where he worked in various roles, including as a prosecutor and senior legal positions at the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

Pulte lays off 62 at Fannie Mae

On Thursday, Pulte announced "a standard business layoff of over 62 people" at Fannie Mae, the government-backed mortgage giant that is under the control of his FHFA.

"We, like any business, must eliminate positions that are not core, or otherwise, to mortgages and new home sales," he wrote in a post on X.

The layoffs included about a dozen officials within Fannie Mae’s ethics and internal investigations unit, removing some of the protections against misconduct at the company, the Wall Street Journal reported, citing sources.

Pulte and other leaders at Fannie Mae made the cuts after growing exhausted with investigations that focused on allegations related to diversity, equity, and inclusion, according to the Journal.

In a post on X on Thursday, Pulte appeared to refer to the cuts by proclaiming, "DEI is DEAD at Fannie Mae!"

The layoffs are the latest shakeup at Fannie Mae, where CEO Priscilla Almodovar abruptly exited two weeks ago.

The moves come as Trump considers selling shares of Fannie Mae and Freddie Mac to the public. Pulte said last month that a public offering could be finalized by late this year or early next year.

Fannie Mae and FHFA did not respond to requests for comments about the layoffs on Tuesday.