In its annual report, Fannie Mae announced that it had set aside $752 million for credit losses in its multifamily operations. This decision was largely due to a decline in property values, increasing delinquencies, and an ongoing investigation into lending transactions suspected of fraud.
The issue of fraud in multifamily lending has become a significant concern for regulators, including Fannie Mae and Freddie Mac. In August 2024, both organizations planned to implement stricter regulations for commercial property lenders and brokers in response to heightened scrutiny regarding CRE fraud. Freddie Mac began requiring additional documentation, such as rent receipts, while Fannie Mae focused on reviewing loans for potentially altered financial information.
Meanwhile, examples of fraud have been proliferating.
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