Fannie Mae, the quasi-government financial firm overseen by the Federal Housing Finance Agency (FHFA), announced a partnership with defense tech company Palantir to detect mortgage fraud using the firm's proprietary technology, which includes some elements of artificial intelligence (just in case they didn't have all of your info...)
Under the agreement, new mortgage applications would be run through Palantir's technology suite to uncover fraud before they reach Fannie Mae, according to the housing giant's president and CEO, Priscilla Almodovar, who added that the tech will allow the organization "to see patterns quicker."
"We’re going to be able to identify fraud more proactively, as opposed to reactively," she said during a Wednesday press conference in Washington D.C. "We’re going to be able to understand the fraud and stop it in its tracks. And I think over time, this really becomes a deterrent for bad actors, because we’re creating friction in the system when they do bad things."
She recalled an exercise where Palantir's technology was given four actual loan packages to assess, which scoured "reams of paper" and identified instances of fraud within 10 seconds - something that would take a human roughly two months.
FHFA Director Bill Pulte - who's also chairman of the Fannie Mae board, said that the financial crimes division that monitors both Fannie and Freddie Mac "is only able to root out crime that it gets made aware of," while Palantir's red-flag approach would tip off investigators to conduct probes they would otherwise not have known to launch.
Fannie Mae has roughly $4.3 trillion in assets - making it a huge target for fraud.
"Why defraud America when you can go somewhere else that won’t buy or implement actual technology that works?" said Palantir CEO and co-founder Alex Carp, who added that the technology's approach is a 'forward-looking' one in which "unique patterns of fraud that heretofore have not been detected" are highlighted "while simultaneously making sure the data is not being used in a way that customers would not want."
"That is a transformational difference between how these things were done in the past or could be done [versus] how they can be done now," Karp continued, according to Fedscoop.
Pulte suggested on Wednesday that this could be the first of many industry collaborations with Palantir.
"There’s a lot of things that are going on with title insurance, with mortgage insurance, with mortgages in general, in terms of AI," said Pulte. "And so I think we have really scratched the surface with Palantir on mortgage fraud, but I wouldn’t be surprised to see us … enter into [other] partnerships with Palantir. We’re also talking with [Musk’s] xAI about some different AI stuff."
Going Public?
The announcement comes the day after President Donald Trump said he's working on taking Fannie Mae and Freddie Mac public.
"I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump posted to Truth Social late Tuesday.
The Trump administration is looking to end the longstanding conservatorship of the housing giants, which have been under government control since the 2008 financial crisis.
"These businesses, in my view are worth - eventually, will be worth - trillions of dollars worth of value to the American taxpayers," said Bill Pulte, adding that Trump is "potentially figuring out how these businesses can continue to be worth more and more money over time," Reuters reports.
When asked for more details, Pulte said it's up to Trump and that he would "eventually make whatever decision that he wants to make, on his own timeline."
The US Treasury owns preferred shares in both firms and warrants to purchase about 80% of their common stock.
