Swalwell drops Pulte suit while FHFA fraud probes stall

One of the targets of the Federal Housing Finance Agency's mortgage fraud probes is dropping his lawsuit against the regulator and its leader.

Rep. Eric Swalwell, D-Calif., FHFA Director Bill Pulte and the agency itself have all agreed to voluntarily dismiss the lawmaker's suit, according to a case filing Friday. The announcement did not specify why the sides came to the agreement, nor did it provide an update on the mortgage fraud probe.

The representative and gubernatorial candidate is one of four prominent political officials who've been targeted by the Department of Justice, and the agency dubbed U.S. Federal Housing, over accusations of mortgage fraud. Swalwell, like others, was accused of designating a second home as a primary home to secure a lower mortgage rate.

In his November complaint, Swalwell accused Pulte of violating the Privacy Act, a Nixon-era law meant to bar federal officials from leveraging their access to private citizens' information to harm political opponents. 

The lawsuit also accused Pulte and the FHFA of violating the First Amendment in targeting Swalwell over his political speech. The Democrat is one of the party's staunchest critics of President Trump and was the impeachment manager for Trump's second impeachment trial following the January 6, 2021 riot.

Pulte in his first year as FHFA boss has touted his efforts to root out fraud from the mortgage system, but has also slammed political officials like Federal Reserve Chairman Jerome Powell. 

"Pulte has developed a reputation within the Trump Administration for pursuing attention-grabbing measures designed to impress and curry favor with President Trump," wrote attorneys for Swalwell in the complaint. 

Neither attorneys for the parties nor spokespersons for Swalwell and the FHFA responded to requests for comment Monday morning. 

Other mortgage fraud cases pending

Swalwell, a California resident, defended himself by claiming the Washington, D.C. home scrutinized by feds was his wife's primary residence. Other officials targeted by mortgage fraud probes have shared similar defenses, and none of their prosecutions have so far stuck.

Feds last May accused New York Attorney General Letitia James of mortgage fraud over her disclosures regarding a Virgina property. A judge tossed that case in November when he found the federal prosecutor was unlawfully appointed, a decision the government has since appealed. 

The FHFA and President Trump also accused Sen. Adam Schiff, D-Calif., a frequent Trump opponent, of mortgage fraud over his designation of a Maryland home. A federal grand jury in November was reportedly investigating the DOJ's handling of the Schiff probe. 

Federal Reserve Governor Lisa Cook has also not been federally charged since being accused last August by the Trump Administration of mortgage fraud. Cook's defense has grown into a larger fight, as the Supreme Court is now weighing whether President Trump can remove a Fed governor.