{"id":642,"date":"2026-11-02T14:55:04","date_gmt":"2026-11-02T14:55:04","guid":{"rendered":"https:\/\/thetheolowgen.com\/?p=642"},"modified":"2026-11-02T14:55:04","modified_gmt":"2026-11-02T14:55:04","slug":"they-kept-the-records-from-the-watchdog-and-called-it-respecting-its-independence-the-federal-housing-finance-agencys-own-inspector-general-told-congress-on-oct-30-that-the-regulator-refus","status":"publish","type":"post","link":"https:\/\/thetheolowgen.com\/?p=642","title":{"rendered":"THEY KEPT THE RECORDS FROM THE WATCHDOG AND CALLED IT RESPECTING ITS INDEPENDENCE | The Federal Housing Finance Agency\u2019s own inspector general told Congress on Oct. 30 that the regulator refused records and information in at least three congressionally mandated evaluations \u2014 including one on its oversight of a lender whose multifamily loans defaulted in June 2024 \u2014 and called the obstruction \u2018unprecedented,\u2019 two weeks after an apparent \u2018understanding\u2019 in mid-August was followed by notice that the agency was \u2018drastically reducing\u2019 the watchdog\u2019s funding, with as much as 80% of its staff, about 80 people, told to expect cuts; the agency says it completed 56 document requests, sat through 16 hour-long meetings and is \u2018proud of its record of respecting the independence\u2019 of the inspector general"},"content":{"rendered":"\n

They kept the records from the watchdog and called it respecting its independence. I know the sentence. It is the one a powerful office says with a straight face while it changes the locks, cuts the allowance, and then thanks the watchdog for its service in the passive voice. Independence, in this usage, means: you are free to look at anything we hand you. I spent years at the You Know Who Post in a cardigan that cost more than a junior auditor\u2019s monthly rent, writing confident paragraphs about how \u201cstrong institutions\u201d and \u201crobust oversight\u201d would hold the line. I believed the inspector general was the line. It turns out the line has a budget, and the budget is set by the people it watches.<\/p>\n\n\n\n

Here is the record. The Federal Housing Finance Agency \u2014 the regulator over the Federal Home Loan Banks and over Fannie Mae and Freddie Mac, which back the majority of U.S. mortgages and have been under its direct oversight since the 2008 financial crisis \u2014 refused to provide records to its own Office of Inspector General, obstructing congressionally mandated reviews, according to a report Reuters\u2019 Marisa Taylor and Chris Prentice reviewed and reported Friday, Oct. 30, 2026. The report, prepared earlier this month and sent to lawmakers that day, says the agency refused records and information during at least three separate evaluations, including one on its oversight of a lender involved in multifamily loans that defaulted in June 2024. It calls the obstruction \u201cunprecedented.\u201d Reuters found it is the first time in at least a decade of the office\u2019s semiannual reports that it has flagged FHFA interference with its independence. The report says the watchdog\u2019s general counsel tried to win cooperation by showing the agency documentation of the office\u2019s congressional mandate \u2014 the OIG is \u201centitled to access \u2018all records,\u2019\u201d it says \u2014 and that in mid-August the two sides appeared to reach an \u201cunderstanding.\u201d Two weeks later, FHFA notified its inspector general that it was \u201cdrastically reducing\u201d the office\u2019s funding. Reuters previously reported that FHFA pulled most of the watchdog\u2019s funding a month ago and that employees have been told as much as 80 percent of staff, or about 80 people, would be cut; staff have received furlough notices. In an Oct. 14 memo, acting Inspector General James Hodge warned that the reductions would undermine the office\u2019s capacity to investigate suspected fraud in multifamily mortgage lending, WRE News\u2019 John G. Stevens reported Oct. 31. The cuts, the new report says, are \u201can extreme escalation of the Agency\u2019s challenge to the OIG\u2019s authority and independence.\u201d This is the same agency whose director, Bill Pulte, appointed himself chairman of both the Fannie and Freddie boards after his March 2025 confirmation, later ousted the acting inspector general, and has made criminal mortgage-fraud referrals against Federal Reserve Governor Lisa Cook and New York Attorney General Letitia James, both of whom deny wrongdoing, Reuters reported.<\/p>\n\n\n\n

Now the defense, and it comes with a tally. An FHFA spokesperson called the allegations incorrect, said the agency \u201creadily produced\u201d information, and said staff completed 56 document requests and attended 16 separate hour-long meetings for just three recent reviews. \u201cFHFA is proud of its record of respecting the independence and role of the OIG and continues to do so,\u201d the spokesperson said. The agency has also defended the cuts by saying the watchdog\u2019s budget and headcount are outsized compared with other regulators\u2019. Fine. WRE News is careful to note the dispute has not been adjudicated and that the agency\u2019s numbers don\u2019t, by themselves, show whether the watchdog got every record it asked for \u2014 and I will be just as careful. But read what the defense is defending. Not the records. The meetings. Sixteen hours in a conference room is a fine way to be seen cooperating and a poor substitute for handing over the file. And the budget argument is the tell: if the watchdog is too big, the watchdog\u2019s size is a question for the Congress that created it, not for the agency it was created to watch. The state\u2019s favorite trick isn\u2019t hiding things from you. It is grading its own homework and then defunding the teacher. Both parties are the help. One loves its inspectors general right up until the inspector general is reading its mail.<\/p>\n\n\n\n

Deb says when the church treasurer started picking which receipts the audit committee got to see, they got a new treasurer, not a smaller audit committee. Buck says he\u2019d like to cut the budget of whoever checks his boat registration by 80 percent and call it respecting their independence, and that this is the first federal policy he has ever understood completely. I love them. They are seasoning.<\/p>\n\n\n\n

\u201cRespecting its independence\u201d is the alibi. The three evaluations are the story. Sit with them until they confess. An agency that sits atop the machinery behind most of the country\u2019s mortgages told its own watchdog no, more than once, then \u2014 two weeks after a handshake \u2014 announced it was taking away most of the watchdog\u2019s money, and now answers with a count of meetings attended. Maybe the full report reads softer than Reuters\u2019 account. I hope it does; I would rather be wrong about this one. But oversight that exists at the pleasure of the overseen is not oversight. It is a courtesy, and courtesies get revoked. The cardigan stays. Fill the notebook. Then ask your senators and your representative, out loud, before the furlough notices turn into pink slips: which records did the inspector general ask for and not get, who decided to cut its funding two weeks after the August understanding, and who will be checking the multifamily lending if as many as 80 of the people paid to check it are gone?<\/p>\n\n\n\n

Sources:<\/strong><\/p>\n\n\n\n