The Federal Housing Finance Agency (FHFA) refused to provide internal records to its watchdog office, according to an Office of Inspector General (OIG) report sent to lawmakers on Friday, October 30, 2026. The report alleges that the agency, led by Director Bill Pulte, interfered with oversight of mortgage entities Fannie Mae and Freddie Mac. The FHFA has denied the allegations, stating it has cooperated with the watchdog and produced numerous documents for recent reviews.
The FHFA, which oversees government-sponsored enterprises that back the majority of U.S. mortgages, has undergone changes since Pulte was confirmed as director in March 2025. Pulte appointed himself chairman of the boards for both Fannie Mae and Freddie Mac and replaced the agency's acting inspector general. The current confrontation follows administrative actions, including the reduction of hundreds of staff members at the regulator and the mortgage businesses it oversees.
According to the OIG report, the FHFA blocked information requests during at least three evaluations, including one involving a lender tied to multifamily loans that defaulted in June 2024. Although the OIG's general counsel argued the office is legally entitled to "all records," the report claims the agency notified the watchdog in late August that it was "drastically reducing" its funding. An FHFA spokesperson contested these claims, stating that staff had completed 56 document requests and held 16 meetings for three recent reviews.
The dispute affects approximately 80 employees within the OIG, representing as much as 80% of the watchdog’s total staff, who have already received furlough notices or been told to prepare for job cuts. The FHFA defends these reductions by stating the OIG’s current budget and headcount are outsized compared to other regulators. The conflict impacts the oversight body for Fannie Mae and Freddie Mac, which provide the financial backing for most residential mortgages in the country.
The OIG, led by acting head James Hodge, informed lawmakers earlier in October 2026 that the budget cuts would prevent the office from fulfilling its mission to identify waste, fraud, and mismanagement. This marks the first time in at least a decade that the OIG has formally flagged agency interference to its independence in a semiannual report to Congress.
The internal conflict also coincides with the FHFA's pursuit of criminal referrals for alleged mortgage fraud against Federal Reserve Governor Lisa Cook and New York Attorney General Letitia James, both of whom have denied wrongdoing. The OIG leaders are in discussions with members of Congress to seek ways to prevent the planned staff reductions. The outcome of these discussions and the final implementation of the budget cuts will determine the future scale of independent oversight for the nation's largest housing finance entities.