US housing agency watchdog warns budget cut will stymie its work
FNMA•The Federal Housing Finance Agency’s inspector general said a budget cut will reduce its annual funding to $20 million, 64% below the White House’s submission, forcing staff cuts of 70%-80% and the discontinuation of investigations.
1. Watchdog warns of cuts
The Federal Housing Finance Agency’s internal watchdog warned lawmakers that it will have to cut most of its staff and will be unable to effectively police misconduct after the regulator cut its budget. Acting Principal Deputy Inspector General James Hodge said the office’s annual budget would fall to $20 million, 64% below the amount the White House submitted to Congress.
2. Investigations at risk
Hodge said the office would have to cut 70%-80% of staff and discontinue investigations. He wrote that $20 million would eliminate its capacity to effectively conduct criminal investigations of mortgage, bank and other fraud schemes involving entities regulated by FHFA.
3. Officials trade criticism
Democratic leaders including Senators Elizabeth Warren and Dick Durbin said the cut was shutting down an independent watchdog responsible for investigating Director Bill Pulte’s alleged misconduct. Pulte said Warren wanted to undermine efforts to align the inspector general’s office with peer offices. FHFA oversees Fannie Mae and Freddie Mac.
