Pulte and other Trump loyalists at mortgage regulator clash with Fannie and Freddie staffers

By Chris Prentice and Marisa Taylor

WASHINGTON, Dec 19 (Reuters) - Days after being sworn in as President Donald Trump’s appointee at a top U.S. housing agency, Bill Pulte began cleaning house.

Since taking over the Federal Housing Finance Agency in March, Pulte has driven out hundreds of employees from the mortgage regulator and Fannie Mae and Freddie Mac, the Fortune 500 mortgage-buying companies he oversees. The brash scion of a homebuilding empire bearing his family’s name, Pulte has supplanted industry veterans with politically or personally connected advisors, including a business partner of Trump’s eldest son and a former registered sex offender who campaigned for the Republican president.

Pulte has also seized the microphone.

In an early move, he ordered staff to hand over control of the Fannie Mae account on X, the social media platform, according to four people familiar with his actions. He soon began using the account, as well as his own personal X profile, to trumpet the White House agenda and level accusations of mortgage fraud against ​prominent Democrats perceived to be political enemies of Trump. Pulte accompanied those accusations with criminal referrals to the Justice Department.

By favoring loyalty and personal ties over experience, and politicizing the once low-profile FHFA and the companies it supervises, Pulte risks undercutting the credibility of Fannie Mae and Freddie Mac, government-ethics specialists say. The government-sponsored enterprises, under FHFA conservatorship since the 2008 financial crisis, underpin the U.S. housing market by backing the majority of all mortgages.

“This reliance on a buddy system – in which people are getting into positions because of ‌their political or personal connections – is unprecedented at these organizations,” said Richard Painter, a Bush administration ethics attorney who co-authored a book about ethical lapses in the banking industry and the 2008 crisis. “It’s a potentially explosive and dangerous situation that could be damaging not only to the mortgage industry but to our economy as a whole.”

Regulating the two companies is a core competency of the FHFA. Fannie specializes in buying mortgages from big banks, packaging them into securities and then selling those securities to create liquidity in the home-loan market. Freddie plays the same role for smaller lenders. Pulte has proposed some policy changes in the market, such as introducing a 50-year mortgage. That idea, aimed at making monthly loan payments more affordable than under ‌the standard shorter terms, has drawn criticism from some quarters as it would mean more interest payments over the life of a loan.