Government-sponsored mortgage giants Fannie Mae and Freddie Mac will close their New York offices following what federal officials describe as “corrupt and dangerous business practices” tied to New York Attorney General Letitia James, according to a source within the Federal Housing Finance Agency (FHFA).
The FHFA, which oversees both Fannie Mae and Freddie Mac, confirmed the decision to reduce operations in the state.
NEW YORK EXODUS — Fannie Mae and Freddie Mac’s New York offices will permanently close in direct response to Attorney General Letitia James’ “corrupt and dangerous business practices” in the state.
— Fox News (@FoxNews) October 2, 2025
Sources tell Fox News Digital they will still employ New York residents and… pic.twitter.com/O901mSThIq
“We are shutting down the two New York offices for Fannie and Freddie as a result of Letitia James’ corrupt and dangerous business practices in the state,” an FHFA source told Fox News.
The source added that while physical offices will be closed, the organizations will maintain operations involving New York residents.
“We’ll still employ New York residents, and we’ll still continue to do mortgage loans in New York, of course. But we are going to eliminate our physical presence. And to the extent that we have leases, we are going to be subleasing those,” the source said.
The decision follows an investigation by the Department of Justice into mortgages taken out by James.
FHFA Director Bill Pulte reportedly submitted a criminal referral to the DOJ in April regarding allegations that James falsified mortgage documents to secure favorable terms.
The investigation centers on a property James purchased in Norfolk, Virginia, in 2023.
According to reports, James identified the home as her primary residence on mortgage documents and forms filed with Fannie Mae and Freddie Mac.
As New York’s elected attorney general, however, James is required to reside in the state.
The controversy has intensified scrutiny of James, who has played a prominent role in legal challenges against President Donald Trump.
During her 2018 campaign, James vowed to target Trump and subsequently led numerous lawsuits against his administration, with nearly 100 challenges filed during his first term.
She pledged to continue pursuing legal action against him following his second election victory.
In August, an appeals court threw out a nearly $500 million civil fraud judgment against Trump, members of his family, and his company.
The court determined that although the New York Supreme Court and James “correctly found defendants liable,” the financial harm “was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State.”
The FHFA’s move to close the New York offices of Fannie Mae and Freddie Mac marks a significant shift for the housing finance industry in the state, where the two entities have long maintained a presence.
Federal officials emphasized that mortgage lending in New York will continue, but the withdrawal of physical operations signals a sharp rebuke of James as she faces ongoing scrutiny.
The Department of Justice has not yet released findings from its investigation into James’s mortgage dealings, and her office has not issued a public response regarding the FHFA’s decision.
