Wells Fargo has filed a lawsuit against JPMorgan Chase in federal court, seeking to recover losses from a $481 million commercial real estate loan that it claims was based on fraudulently inflated financial metrics. The loan, originated in 2019 under the CMBS deal JPMCC 2019-MFP, was used to finance the $522 million purchase of 43 multifamily properties across 10 U.S. states by the Chetrit Group. The lawsuit alleges that JPMorgan and the Chetrit Group were aware that the historical net operating income (NOI) figures provided by the seller, ROCO Real Estate LLC, were overstated by approximately 25%. Despite this, JPMorgan proceeded with the loan, later securitizing and selling it to investors through a commercial mortgage-backed securities trust. Wells Fargo, acting as trustee for the investors, claims that the borrower defaulted on the loan in 2022, leaving more than $285 million unpaid and causing significant losses for investors. The trust reportedly suffered tens of millions in losses as a result of the default, amid a broader rise in multifamily delinquencies, which climbed to a 6.6% CMBS delinquency rate by the end of 2024. The lawsuit also names Meyer Chetrit, a principal of the Chetrit Group, as a defendant for providing a loan guarantee. Both JPMorgan and the Chetrit Group have declined to comment on the case.