Freddie Mac places appraiser BBG under review

UPDATED 5/31/24, 11:25 A.M.

Freddie Mac has temporarily stopped accepting new loans with valuations or appraisals from one of the biggest appraisal firms amid the agency’s widening investigation into mortgage fraud.

Freddie has put Dallas-based BBG under an internal review this week. 

The agency also said it will not deal with any appraisals or valuations in which Jon DiPietra, a managing director of BBG’s New York office, was involved in any capacity. DiPietra is on Freddie’s “restricted vendor” list, which is essentially Freddie’s blacklist.

The news was first reported by commercial real estate newsletter The Promote.

DiPietra provided appraisal and valuation work to owners of some of the largest buildings in the city, including Silverstein’s 52-story 7 World Trade Center, 650 Fifth Avenue, and Durst’s Hallett’s Point, a 2.4 million-square-foot mega project, according to BBG’s website. 

It is unclear what led Freddie to place BBG under review or DiPietra on the restricted vendor list. Neither returned requests to comment. 

Freddie and Fannie Mae have been aggressively pursuing brokers, investors, and title insurance companies across the country over alleged connections to mortgage fraud schemes. The agencies have discovered that some of their loans were fraudulent. Investors inflated valuations to obtain larger loans then they would have otherwise obtained. Those loans were then sold to Fannie or Freddie. 

The schemes came to the forefront when real estate investor Boruch Drillman pleaded guilty in December to conspiring with others to provide fake documents to lenders to obtain loans for a rental property in Cincinnati and an office complex in Troy, Michigan. 

BBG is the first appraiser to come under scrutiny as the investigation widens. BBG is considered to be one of the “Big Five” national commercial real estate valuation firms and has 4,500 clients and 50 offices, according to its website. 

DiPietra began his career as an appraiser in 2001. He has “consistently been the top producer,” according to BBG. The firm’s website said he specializes in multi-family appraisals and portfolios. He also served on the board of the Metro NY chapter of the Appraisal Institute, the industry’s advocacy group.

Appraisers play a key role in real estate lending. The appraiser’s valuation is used as a basis for how much a lender is willing to lend. 

Correction: The Real Deal previously incorrectly reported DiPietra serves on the Appraisal Institute. DiPietra’s board term ended several years ago.

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