Fannie Mae partnership with Palantir will use AI technology to detect and prevent mortgage fraud
Fannie Mae is turning to artificial intelligence technology to continue its battle against mortgage fraud. The government-sponsored enterprise announced a partnership with Palantir to use AI technology to discover fraud, starting with multifamily mortgages.
The partnership was announced Wednesday at a press conference that included Bill Pulte, chairman of Fannie Mae, Priscilla Almodovar, president and CEO of Fannie Mae, and Alex Karp, co-founder and CEO of Palantir.
The AI-powered Crime Detection Unit will use Palantir’s technology, which will allow it to monitor transactions, activities, and behaviors to detect suspicious activities and trigger investigative actions.
Pulte (pictured top left), the director of the Federal Housing Finance Agency (FHFA), said the fraud-reduction efforts are part of the Trump administration’s goal to reduce housing costs.
“President Trump is laser-focused on reducing housing costs in this country,” Pulte said. “When people defraud the system, we have to account for the cost in mortgages for that. If we can get rid of fraud, not only do we stop bad actors and make sure that a 2008 never happens again, but also reduce costs by getting rid of risk. And when we have fraudsters, and we can't track fraudsters, we have to price in risk.”
Almodovar (pictured top right) said they tested Palantir by reviewing four loan files for fraud to see how long the company’s AI would take to discover the fraud compared to human investigators.
“We gave them four loan files,” Almodovar said. “It was a mortgage case, a fraud case where someone had (doctored) the financial statements. It was one broker involved in all these four cases. It took our really talented investigators 60 days to detect fraud in two of these files. It took (Palantir’s) technology 10 seconds. Like, holy cow. So that really did it for us at Palantir.”
Decisions haven’t been made on single-family, Freddie Mac
If Palantir finds significant fraud with Fannie Mae, Pulte believes it will be used with Freddie Mac as well.
“I think he's going to find a lot of fraud,” Pulte said. “If he finds a lot of fraud, then we'll copy and paste it over to Freddie Mac. But look, this has never been done before. It's kind of crazy. You think about it, you have all these mortgages. You got $4 trillion. Nobody's had the compute power or the wherewithal to do this. And so, you know, first steps, first, we'll do the fraud. If that works out, we'll bring it to Freddie Mac.”
Pulte said the plan is to start with multifamily because that’s where they’ve seen the most fraud.
“I think this occupancy fraud thing is out of control,” Pulte said. “(People are) saying that they're in one state, but really, they live in another state. So, there's some things that you know you could do with just some basic searching algorithms to understand where people are defrauding the system by saying that they live in one state when really they live in another.”
While the plan is to train Palantir’s AI on past mortgages, Almodovar said the hope is to use it to keep future fraudulent mortgages from even getting to Fannie Mae.
“I would say it is definitely forward-looking, particularly on single-family,” she said. “We want to detect the fraud on the front end. We want to make sure that these loans don’t even get delivered to us. We want to help the system lenders, in particular, to detect this really early, as close to the consumer.”
Almodovar noted that decisions have not yet been made on using this product with single family loans.
No details on Fannie and Freddie conservatorship
Pulte was asked several questions about President Trump’s plan to remove Fannie Mae and Freddie Mac from conservatorship but mostly yielded to Trump’s social media posts rather than provide new details.
Federal Housing Finance Agency (FHFA) director Bill Pulte and secretary of Housing and Urban Development (HUD), Scott Turner, received a ringing endorsement from UWM CEO Mat Ishbia during the company’s broker event, UWM LIVE! https://t.co/bIiT6zM6bq
— Mortgage Professional America Magazine (@MPAMagazineUS) May 16, 2025
“He said that he was looking forward to potentially taking them public,” Pulte said. “And then he went on to say essentially that about the implied guarantees and that that the government would stay in control and that he would be continuing to oversee this... and so I welcome his involvement. I am grateful for his involvement, and he'll eventually make whatever decision that he wants to make on his own timeline.
“It's important to remember that there was a 2021 decision, and I would defer to the president anyway, but the president is the only one who can hire and fire the FHFA Director. So, the president is essentially … the conservator of Fannie and Freddie. So, the president obviously is therefore in charge of these different things that is in US Federal Housing FHFA’s purview.”
While Pulte cited the president’s comments about taking Fannie and Freddie public, he noted that they already are public entities.
“Fannie and Freddie are already public,” Pulte said. “They trade on the pink sheets, on the over the counter (OTC market). Their common stock trades publicly. But I think what President Trump is maybe talking about is … potentially figuring out how these businesses can continue to be worth more and more money over time. You know, these businesses, in my view, will eventually be worth trillions of dollars to the American taxpayers. And I think the president will still be in control.”
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