U.S. prosecutors are cracking down on commercial mortgage fraud due to inflated property values and manipulated financial statements. As property values drop and defaults rise, federal agencies are investigating and prosecuting cases, which resulted in numerous landlord plea deals. John Griffin, professor of finance at the University of Texas states, “It’s a general trend throughout history that fraud occurs during boom times and revealed during bust times.” Additionally, government backed mortgage enterprises such as Fannie Mae and Freddie Mac tightened their lending rules in response.
Property Fraud Allegations Rise as Commercial Real-Estate Values Fall
