There's a significant upswing of commercial mortgage fraud according to a Wall Street Journal report. Federal prosecutors are chasing down cases of borrowers who illegally manipulate financials and property valuations.

That's creating concerns across the ecosystem, with lenders and investors likely sources of the bigger worries. Fraudsters, cheaters, and cons aren't a new invention. They exist in every industry and undertaking, usually represent a small portion of activity, and can be planned for.

Real danger comes when regular market participants are hot to close deals when things are busy and then conditions change. Falling valuations and transactions coupled with higher interest rates and a CRE mortgage maturity wave put many into risky and uncomfortable situations. As Warren Buffett has famously said, when the tide goes out you can see who was swimming naked.