Expect tightened commercial real estate lending rules
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Decline in real estate values due to high interest rates and rising defaults.
Commercial property landlords face high interest rates and may provide inflated financial statements to increase property prices.
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Fannie Mae and Freddie Mac, holding 40% of the $2.2T in multifamily mortgage debt as of 09/2023, are concerned about mortgage fraud.
Meridian Capital Group, a NYC brokerage firm, has been blacklisted by Fannie Mae and Freddie Mac.
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Since Fall 2023, many landlords of multifamily properties have inflated income statements and sales figures.
Lenders have issued larger loans based on doctored values, leading to real estate fraud.
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Implementation could start this summer.
Lenders will need to conduct due diligence on financial statements, not just property valuations.
Less trust in borrowers and property financials.
Slowing down real estate deal flow.
