Freddie Mac is currently investigating a deal brokered by the Meridian Capital Group, a well-known commercial mortgage broker based in New York. This investigation has resulted in a temporary suspension of their business relations, which has had a significant impact on Meridian’s portfolio. Ralph Herzka leads the company, and in response to the investigation, they have placed one broker on leave and are cooperating with Freddie Mac’s inquiry.

The investigation is a blow to Meridian Capital Group because of Freddie Mac’s critical role in the multifamily industry. Freddie Mac is a major source of loans for the multifamily industry, and the suspension of their activities related to brokering deals for Freddie Mac lenders reflects the agency’s heightened efforts to combat mortgage fraud.

Meridian Capital Group is well-known for its primary focus on mortgage brokerage. Besides mortgage services, the company also engages in investment sales and retail leasing, while facilitating senior housing and healthcare deals. They specialize in providing loan services to small building owners.

Previously, Meridian had a stake in Beech Street Capital, but they lost this stake when Capital One acquired Beech Street in 2013, leading to a pause in Herzka’s lending business investments. However, in 2021, Meridian partnered with investment manager Barings to launch NewPoint Real Estate Capital, an originator led by David Brickman, the former CEO of Freddie Mac. Notably, Meridian is an investor in a lending platform run by Brickman.

Both Freddie Mac and Meridian Capital Group have refrained from making any comments regarding the investigation. However, Meridian has reaffirmed its commitment to industry standards and best practices, emphasizing its trusted relationships with its stakeholders. It’s worth noting that a company can be removed from the blacklist if it is cleared of any allegations.

Then there is this too..

A California real estate executive, Tyler Ross, pleaded guilty for faking financial statements. He was the co-CEO of ROCO Real Estate and ROCO Management in Michigan, involved in buying and managing apartment complexes.

Tyler Ross inflated property income to deceive lenders from 2015 to 2019. He and his group submitted false financial documents to mortgage lenders, making their properties seem more profitable. They deleted real expenses from financial records and sent the fake ones to lenders.

Tyler Ross, who is also a lawyer, is set to be sentenced on March 12, 2024, facing a maximum of five years in prison.

Federal agencies like FHFA-OIG, HUD-OIG, and the FBI are investigating this case, and prosecutors from the Criminal Division’s Fraud Section and the Eastern District of Michigan are handling it.

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