A growing controversy has emerged within the U.S. housing finance system after several Fannie Mae ethics officials were removed from their positions. They had reportedly been investigating whether top figures in the Federal Housing Finance Agency (FHFA) accessed private mortgage files of public officials, including Letitia James and Adam Schiff, without authorization. According to reports, the internal investigation focused on possible misuse of confidential mortgage data involving several political figures. Among them were New York Attorney General Letitia James, California Senator Adam Schiff, and Federal Reserve Governor Lisa Cook. Each has denied any wrongdoing, calling the allegations politically driven. The issue began when William Pulte, a strong supporter of former President Donald Trump and current head of the FHFA, accused the officials of mortgage fraud. Legal experts and former agency leaders questioned the validity of those referrals, describing them as unusual and potentially politically motivated. Mortgage data is protected by strict privacy laws. Typically, investigations into such matters are handled by law enforcement, not by the FHFA inspector general. The decision to involve the FHFA drew widespread concern over political interference in financial oversight. Fannie Mae’s ethics and internal investigation teams reportedly received complaints that senior FHFA officials had instructed staff to access confidential mortgage information about James, Schiff, and Cook. In response, the ethics team referred the matter to the FHFA inspector general’s office, which later passed it to the U.S. attorney for the Eastern District of Virginia. The office of the U.S. attorney recently came under new leadership when Trump ally Lindsey Halligan was appointed to the post. Sources familiar with the matter said Halligan appeared displeased about receiving the referral, as it could become part of discovery materials required for legal defense in James’s case. Some reports suggested Halligan forwarded details of the investigation to the White House. However, Halligan denied the claim, stating she never shared information outside official channels. Shortly after the referral, a wave of dismissals took place within Fannie Mae. Around a dozen staff members involved in ethics and internal oversight were reportedly terminated. Among those dismissed were Suzanne Libby, Fannie Mae’s chief ethics officer, and several members of her team. Danielle McCoy, the company’s general counsel, also resigned under pressure. These removals have sparked speculation that the shake-up aimed to halt the internal probe into potential misuse of data. Adding to the turmoil, Joe Allen, who had been serving as the FHFA’s acting inspector general, was asked to step down. The official website now lists the inspector general’s position as vacant, raising concerns about the independence of the agency’s oversight functions. The FHFA has rejected claims of interference, calling the reports “fake news” and saying that critics are attempting to obstruct the justice process. The Department of Justice did not issue an immediate comment on the situation. However, experts warn that the removals could damage confidence in the agency’s ability to ensure ethical conduct. Many fear the episode may mark a dangerous overlap between political loyalty and institutional accountability. Legal scholars argue that federal housing agencies must remain independent to protect the integrity of sensitive data. Unauthorized access to mortgage records could not only breach privacy but also erode public trust in financial institutions. The unfolding situation is drawing attention in Washington, where lawmakers from both parties are seeking more information about the firings and the halted investigation. The Fannie Mae ethics probe has highlighted a growing tension between political power and regulatory transparency. Critics say that removing ethics officers during an ongoing investigation sends the wrong message about accountability. Observers are now calling for a formal congressional review to examine whether any laws were broken and to restore public confidence in the agency’s internal controls. As the controversy deepens, questions remain about who authorized the alleged access to private files and whether the dismissed officials will challenge their removals. For now, the absence of clear oversight leadership leaves uncertainty hanging over one of the nation’s key financial watchdogs.