Fired Fannie Mae Staff Sue Mortgage Giant

A mass firing at Fannie Mae has escalated into multiple legal battles as dozens of former employees alleging discrimination and defamation tied to the company’s charitable giving program.

Sixty-six workers — all U.S. citizens of Indian nationality, most over 40 and long-tenured — allege they were abruptly terminated on Apr. 3 during a Microsoft Teams call where they were accused of fraud. The employees claim nearly all attendees spoke Telugu, and the only charities flagged were those supporting Indian cultural programs.

No evidence of wrongdoing has been provided, according to their federal lawsuit filed July 21 in Washington, D.C, according to Inman.

The plaintiffs want damages for alleged discrimination, emotional distress, lost wages and reinstatement. They also say they were owed severance equal to two weeks per year of service, with many having worked at Fannie for more than a decade.

The legal fallout didn’t end there. On Aug. 12, 41 of the fired staff lodged separate defamation suits in Fairfax County, Virginia, against Fannie chair Bill Pulte and CEO Priscilla Almodovar, each seeking $41 million.

The cases center on an Apr. 8 press release in which Pulte touted firing “over 100 employees” for “facilitating fraud” and later claimed on Fox News that staff were taking kickbacks from charitable donations. Almodovar, quoted in the same release, thanked Pulte for rooting out unethical conduct.

The lawsuits maintain the employees had clean disciplinary records and that public fraud accusations — which could rise to a felony — have torpedoed their reputations and employability. Attorneys argue Pulte and Almodovar either knew their statements were false or acted with reckless disregard for the truth.

Fannie and its regulator, the Federal Housing Finance Agency, did not respond to requests for comment from the outlet, which first reported the lawsuits. No criminal charges have been filed against the terminated staff.

Fannie and Freddie Mac plunged into chaos as soon as Pulte took over the FHFA. In his first week, he ousted more than a dozen board members at the two companies and installed himself as the chair of both boards. He also placed dozens of agency employees on administrative leave.

The organizations may soon be subject to an initial public offering.

— Holden Walter-Warner