Meridian Capital Group’s Ralph Herzka is changing roles as the commercial brokerage faces increased scrutiny from Fannie Mae and Freddie Mac.
The firm hired Brian Brooks, who previously served as Fannie Mae’s general counsel, as CEO. Brooks also served as acting Comptroller of the Currency under former Treasury Secretary Steven Mnuchin. Herzka will become senior chairman, focusing on transaction growth and relationship expansion.
The move comes after Meridian was blacklisted by Fannie and Freddie, when a few of its brokers allegedly inflated sale prices on properties to help owners obtain larger loans.
Brooks will now be tasked with fixing these issues, and according to Bloomberg, will focus on building compliance and risk infrastructure at the firm. That could take more than a year.
Meridian has been the largest Freddie Mac and Fannie Mae broker for the past seven years, according to the Commercial Observer. In November, Fannie told lenders that any loan made through Meridian brokers required an extra level of review.
Meridian said its president, Yoni Goodman, will stay in his role and work with Brooks, focusing on broker recruiting, retention, investment sales and retail leasing strategy.
Herzka is a titan in New York real estate. Under his reign, Meridian carved a niche arranging thousands of loans for small building owners who needed financing. He was known as a workhorse; his firm’s motto is “Eat. Sleep. Close. Repeat.” Meridian said Herzka arranged more than $550 billion in commercial real estate financing for more than 11,000 customers since its founding.
“Thanks to the work of our leadership and team, we are positioned well to stand tall and thrive in the service of our stakeholders as the real estate market and regulatory environment evolve,” Herzka said in a statement.
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