The head of Fannie Mae and Freddie Mac’s federal regulator has referred a fourth perceived enemy of the Trump administration — California Rep. Eric Swalwell — to the Department of Justice on allegations of mortgage and tax fraud, according to news reports citing anonymous sources.
Swalwell — a Democrat and longtime critic of President Trump who serves on the House Judiciary and Homeland Security committees — is the fourth Democrat to face allegations of mortgage fraud from Federal Housing Finance Agency Director Bill Pulte.
Like the others facing such accusations — New York Attorney General Letitia James, Sen. Adam Schiff and Federal Reserve Governor Lisa Cook — Swalwell says he’s done nothing wrong and is a target of political retribution, warning that Democrats will retaliate after the midterms.
Pulte’s criminal referral of Swalwell concerns a Washington, D.C., home, according to NBC News, which was the first to report the story Thursday.
The referral “alleges several million dollars worth of loans and refinancing based on Swalwell declaring his primary residence as Washington, D.C.” and “calls for an investigation into possible mortgage fraud, state and local tax fraud and insurance fraud,” NBC reported, citing “a person familiar” with the referral.
The FHFA did not respond to Inman’s request for a copy of the referral.
Eric Swalwell
“I only have one mortgage and a residence in California, and I spend my time every week between California and Washington, D.C.,” Swalwell told MSNBC. “This is just Donald Trump doing everything he can to target his enemies.”
Swalwell sued Trump and his son, Donald Jr., two months after the Jan. 6, 2021, takeover of the U.S. Capitol by protestors, accusing them of inciting violence, CBS News reported at the time. The case is pending in a federal district court in Washington, D.C..
“It’s not lost on me that we’ve begun to depose members of the administration, and so you can connect the dots there, if you will,” Swalwell said.
Of the four officials Pulte has accused of mortgage fraud, only James has been charged — by a prosecutor who was appointed after other Justice Department attorneys reportedly balked at seeking an indictment.
James’ attorney claimed Pulte cherry-picked documents when filing his April 14 referral of her and ignored other records “which refute the allegations of impropriety.” James has yet to be charged with wrongdoing involving the two properties listed in Pulte’s referral — she’s pleaded not guilty to an Oct. 9 indictment that lists a different property.
The Trump administration is seeking to remove Cook from the Federal Reserve Board, citing Pulte’s allegations, but the Supreme Court has upheld lower court rulings blocking Trump from firing Cook pending a January hearing.
Fannie Mae ethics unit purged
The Wall Street Journal reported Tuesday that a dozen officials in Fannie Mae’s ethics and internal investigations unit who were fired on Oct. 30 were looking into whether “Pulte had improperly obtained mortgage records of key Democratic officials.”
The Journal had previously reported that Fannie Mae Chief Ethics Officer Suzanne Libby was fired in the purge, while General Counsel Danielle McCoy was pressured to resign. Fannie Mae CEO Priscilla Almodovar was also removed from her job last month, and Chief Operating Officer Peter Akwaboah is serving as Fannie Mae’s CEO on an interim basis.
Legal experts have questioned Pulte’s legal authority to make criminal referrals to the Department of Justice, saying that power is reserved for the FHFA’s Office of the Inspector General.
Acting FHFA Inspector General John “Joe” Allen was asked to resign from his job last week after sending Fannie Mae’s internal investigation to the Department of Justice, the Journal reported Tuesday.
The FHFA claims that the Journal’s anonymous sources “are attempting to obstruct the criminal justice system by completely fabricating false and defamatory claims,” but provided no specifics when asked for comment by the paper.
California Democratic Rep. Dave Min, a former SEC prosecutor who serves on the House Oversight Committee, wrote Allen in September demanding that he open an investigation into whether Pulte violated any laws “by misappropriating and misusing non-public mortgage data” in sending the criminal referrals to the Department of Justice.
Pulte denies ‘weaponizing’ Fannie and Freddie’s regulator
The Wall Street Journal’s conservative editorial board has characterized Pulte’s criminal referral of Cook as “an ominous turn in political lawfare” and warned that “weaponizing” the FHFA “won’t build confidence in America’s institutions or markets.”
In a similar vein, the Journal’s editorial board this summer warned that Pulte’s campaign to undermine Federal Reserve Chairman Jerome Powell’s credibility and pressure him to lower interest rates or resign was likely to backfire. President Trump now seems resigned to letting Powell serve out the remainder of his term as Fed chair, which ends in May.
Pulte, who appointed himself the chair of Fannie and Freddie’s boards of directors in March, has objected to allegations that he’s weaponized the mortgage giants for political purposes.
Claiming mortgage fraud is “rampant” at Fannie Mae and Freddie Mac, Pulte hired the controversial data analytics company Palantir Technologies to help Fannie Mae detect mortgage fraud in May.
“If it’s a Republican who’s committing mortgage fraud, we’re going to look at it,” Pulte said in an Aug. 21 Bloomberg TV interview. “If it’s a Democrat, we’re going to look at it. If it’s a wealthy politician or a lawyer, we’re going to look at it.”
ProPublica reported in September that three Trump Cabinet members have claimed more than one home as a principal residence: Labor Secretary Lori Chavez-DeRemer, Transportation Secretary Sean Duffy, and Environmental Protection Agency chief Lee Zeldin. A White House spokesperson called ProPublica’s reporting a “hit piece.”
Swalwell suggested Thursday that Democrats will turn the tables against Republicans after the 2026 midterm elections.
“A year from now, we are going to win the majority … and when we’re in the majority, we will have subpoena power and accountability will happen,” Swalwell said on MSNBC. “So Bill Pulte and any other lawless official who is carrying out these political prosecutions on behalf of Donald Trump, they should familiarize themselves with the judiciary committee room, because they’re going to be spending a lot of time there answering questions, and I sure hope everything they did was above board.”
Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.
