New leadership at the government-sponsored enterprise announces cull of workforce
Fannie Mae said on Tuesday that it had terminated over 100 employees for unethical conduct including facilitating fraud.
The government-sponsored enterprise (GSE), officially known as the Federal National Mortgage Association, revealed that it had let the staff go as the latest shakeup in the organization since the Trump administration made sweeping changes to the board.
Bil Pulte, appointed under Trump as Federal Housing Finance Agency (FHFA) director, had earlier fired more than a dozen board members of Fannie Mae and Freddie Mac and named himself chairman of the board.
“In President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry,” Pulte said on Tuesday, commenting on the latest wave of terminations.
“Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company. Anyone who commits fraud against Fannie Mae does so against the American people.”
Fannie and Freddie staying in the headlines
The news marks the latest headline in an eventful week for Fannie and its fellow GSE Freddie Mac.
Earlier this week, it was revealed that thousands of condominiums have shown up on a secret Fannie Mae blacklist, making it difficult to get loans on those properties. The list was acquired by the law firm Allcock & Marcus, and includes nearly 700 condos in Miami-Dade, Broward, and Palm Beach counties in Florida alone, as well as more than 700 communities in California.
Without the ability to get government-backed loans for these properties, brokers must rely on non-QM mortgages. This is one of the factors leading to a slowdown in the condo market, according to Redfin. In February, 68.4% of US condos sold below their original asking price.
Last month, Pulte ordered Fannie Mae and Freddie Mac to discontinue key housing initiatives, including SPCPs, which expand mortgage access to first-time and lower-income homebuyers.
FHFA Director Bill Pulte ordered Fannie Mae & Freddie Mac to roll back key housing initiatives, including SPCPs & tenant protections.https://t.co/TL7Xm5F8A3
— Mortgage Professional America Magazine (@MPAMagazineUS) March 27, 2025
The National Association of Mortgage Brokers (NAMB) said in a statement that they were concerned about the SPCP rollback.
“These programs have served as a critical pathway to affordable homeownership for many first-time and underserved homebuyers, who annually make up approximately one-quarter to one-third of homebuyers,” the NAMB said.
Pulte’s memo also outlined how Fannie and Freddie would no longer monitor and enforce unfair or deceptive acts or practices (UDAP) by lenders, servicers, and third parties.
Mortgage Bankers Association president and CEO Bob Broeksmit said in a statement that he approved of the decision.
“MBA supports the rescission of this advisory bulletin and thanks Director Pulte for prioritizing this issue in response to our members’ concerns, which we raised at the time of the policy’s release in November and reiterated to the Director immediately upon his confirmation,” Broeksmit said.
Rumors still swirl about privatization
Rumors have circulated that the Trump administration may want to privatize both enterprises. Jose Tejada, vice president of mortgage lending with Rate.com, told Mortgage Professional America that mortgage rates would likely jump if the enterprises were privatized.
“It’s fairly certain that the immediate effect of privatization is that it will raise mortgage rates,” Tejada said. “A backing by the government creates a nice safety net. Coming off of that, agencies will be impacted by market dynamics and will react to the same. In this environment, that means higher rates.”
Privatization would begin with an Initial Public Offering, which would involve selling shares of the companies to investors. This would clear Fannie and Freddie from the government ledger, providing a cash surge to the government but causing uncertainty in the mortgage market.
For now, the two remain on the government’s ledger. Priscilla Almodovar, president and chief executive officer of Fannie Mae, applauded the terminations.
“I would like to thank Director Pulte for his empowering of Fannie Mae to root out unethical conduct, including anyone facilitating fraud,” Almodovar said. “We hold our employees to the highest standards, and we will continue to do so.”
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