Clarifies paragraph 7 to show standard agency policy on letters to Congress
FHFA's acting inspector general Joe Allen removed amid political tensions
Pulte bypassed Inspector General in pursuing cases against Trump foes
Trump administration has removed nearly two dozen agency watchdogs
U.S. Senator Elizabeth Warren demands answers from FHFA Director Pulte
By Sarah N. Lynch, Chris Prentice and Marisa Taylor
WASHINGTON, Nov 3 (Reuters) - The internal watchdog for the U.S. Federal Housing Finance Agency is being removed from his role, four people familiar with the matter said, at a time when the housing regulator is playing a role in President Donald Trump's targeting of perceived political enemies.
The ouster of Joe Allen, FHFA's acting inspector general, follows the agency's director, Bill Pulte, becoming an outspoken voice in support of the Trump administration. Across the government, the Trump administration has so far fired or reassigned close to two dozen agency watchdogs, who police waste, fraud and abuse. It has also defunded the group that supervises those offices.
The FHFA did not immediately respond to emails and a call seeking comment. The four people spoke on condition of anonymity as they are not authorized to discuss internal moves at the agency.
Created after the 2008 financial crisis, the FHFA is typically a low-profile regulatory office, but Pulte has launched a new hotline targeting mortgage fraud and made public criminal referrals against a series of Trump foes including New York Attorney General Letitia James, as well as Federal Reserve Board Governor Lisa Cook and California Democratic Senator Adam Schiff.
Lindsey Halligan, the interim U.S. attorney for the Eastern District of Virginia who was hand-picked for the job by Trump, subsequently indicted James after her predecessor declined to do so, citing a lack of evidence.
Allen received notice of his termination from the White House after he made efforts to provide key information to prosecutors in that office, according to four sources. The information he turned over was constitutionally required, two of them said, while a third described it as being potentially relevant in discovery.
His ouster also came about as he was preparing to send a letter to Congress notifying lawmakers that the FHFA was not cooperating with the inspector general's office, three of the sources said. These individuals said the FHFA director would typically have been notified of such a letter. Reuters was unable to independently determine whether Pulte was informed.
James has pleaded not guilty to one count of bank fraud and one count of lying to a financial institution. Her legal team is seeking to have the case dismissed, claiming Halligan's appointment was unlawful and the prosecution is vindictive.
Trump previously publicly called on Attorney General Pam Bondi to bring charges against James, along with several of his other political foes.
Pulte has circumvented the agency's Office of Inspector General in pursuing those three cases, Reuters previously reported.
Allen had reported to work on Monday, according to the sources.
He also served as chief counsel of the FHFA's inspector general's office. It was not immediately clear whether he was continuing in that latter role, three of the people said.
Allen could not be reached for comment.
He became FHFA's acting inspector general in April 2025, according to an archived page of the agency's website.
On Monday, the website for the FHFA's Office of Inspector General listed the position as "currently vacant". It was unclear when the website was updated.
The most recent snapshot available via the Internet Archive was from late September and listed Allen as acting inspector general.
In response to news of Allen's removal, Democratic U.S. Senator Elizabeth Warren of Massachusetts said, "Director Pulte has some answering to do."
Before joining FHFA's inspector general's office, Allen was a 40-year veteran at the Justice Department, where he held various roles from a federal prosecutor to senior legal positions with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
James, a Democrat who last year secured a $450 million fraud judgment against Trump, last month pleaded not guilty to criminal charges of allegedly lying on mortgage documents after Pulte suggested the Justice Department investigate her.
Pulte's leadership at FHFA and over the government-sponsored entities it oversees has been tumultuous. Just last week, he said he had fired dozens of staff at Fannie Mae.
(Reporting by Sarah N. Lynch, Chris Prentice and Marisa Taylor; Editing by Scott Malone, Nia Williams and Daniel Wallis)
((christine.prentice@thomsonreuters.com; +1 (202) 843-6464;))