Fannie Mae finds mortgage fraud in multifamily lending transactions

Fannie Mae (FNMA) disclosed in its annual filing that In 2024, it continued to realize a benefit for credit losses, which represents a $938M single-family benefit for credit losses, largely offset by a $752M multifamily provision for credit losses. The $186M benefit in 2024 was $1.5B lower than the $1.7B benefit in 2023. “This decline was primarily driven by a lower single-family benefit due to stronger alignment between actual home price growth and our forecast in 2024 than in 2023. This decline was also driven by a higher multifamily provision primarily attributable to an incremental decline in property values, rising delinquencies and the ongoing investigation of lending transactions with suspected fraud,” the company stated. Fannie added, “We have discovered instances of multifamily lending transactions in which one or more of the parties involved engaged in mortgage fraud or possible mortgage fraud, and we continue to investigate additional multifamily lending transactions in which we suspect fraud may have occurred and may discover additional multifamily loans we have purchased that were affected by fraud.”