On April 8, Fannie Mae, a government-sponsored enterprise, revealed it had let go of more than 100 employees as a result of fraudulent actions, particularly involving mortgage fraud, targeting the company. While the specifics of the fraud were not disclosed, the consequences have been significant.

Statements from Leadership

Following the announcement, William J. Pulte, the newly appointed Director of the Federal Housing Finance Agency (FHFA) and Chairman of Fannie Mae’s Board, publicly condemned the actions of the dismissed employees.

“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. 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,” said Pulte.

Priscilla Almodovar, President and CEO of Fannie Mae, expressed her gratitude towards Pulte for empowering the company to eliminate unethical practices, emphasizing the commitment to uphold high standards among employees.

Extent of Layoffs and Allegations of Misconduct

Reports from various sources, including Indian news outlets, indicated that approximately 700 employees may have been affected by layoffs at Fannie Mae. Of these, about 200 of the dismissed workers were cited for ethical violations. The misconduct involved the abuse of Fannie Mae’s matching gifts program, designed to match employee donations to selected organizations, up to $5,000.

Allegations suggest that some employees colluded with external organizations, including the Telugu Association of North America (TANA), to misappropriate funds. Notably, at least one of the terminated employees held a position as a regional vice president within TANA.

Context of Workforce Reductions

In addition to Fannie Mae’s actions, Pulte highlighted a broader trend within the FHFA, noting a workforce reduction exceeding 25%. In a post on the social media platform X (formerly Twitter), he remarked on initiatives to consolidate divisions aimed at enhancing homebuilding efforts and ensuring the integrity of the housing sector.

“We exceeded DOGE’s expectations,” Pulte stated, referring to the “Department of Government Efficiency.” “We’re consolidating divisions to focus on building more homes and strengthening safety and soundness.”

Future Implications

The Trump administration has made it clear that one of its objectives is to terminate the government conservatorship of Fannie Mae and Freddie Mac, established following the 2008 financial crisis. It remains uncertain how the recent staffing reductions will influence this goal.