Mortgage financing giants Fannie Mae (FNMA) and Freddie Mac (FMCC) are set to enforce stricter regulations for commercial property lenders and brokers, in response to a growing regulatory crackdown on fraud within the multi-trillion dollar market. This move was reported by the Wall Street Journal on Monday.
According to sources familiar with the preliminary plans, lenders will be required to independently verify financial information related to borrowers of apartment complexes and other multifamily properties. This verification is aimed at ensuring the accuracy and reliability of borrower financial data.
Additionally, the new rules will mandate that lenders implement more rigorous procedures for confirming that property borrowers have sufficient cash reserves and verifying the origins of their funds.
The Federal Housing Finance Agency (FHFA), the primary regulator overseeing Fannie Mae and Freddie Mac, declined to comment on the forthcoming changes.
The regulatory enhancements come as part of broader efforts to mitigate fraud risks and ensure the integrity of the commercial property financing sector.
