Walker & Dunlop Posts $37.3 Million Quarterly Loss

An apartment lender holding 13.7% of Fannie Mae and Freddie Mac lending this year spent the summer cleaning out its basement ^[1].

Walker & Dunlop said it lost $37.3 million, or $1.15 per share, in the third quarter, according to its earnings release ^[1]. The loss came mostly from $56 million of write-downs on loans it repurchased from Fannie Mae and Freddie Mac after borrower fraud, which it now plans to sell by early 2027 ^[1].

By the numbers

• Total revenue slid 12% to $298.4 million, and total transaction volume fell 11% to about $13.8 billion ^[1].
• Freddie Mac volume dropped 63% and Fannie Mae volume dropped 40%, while brokered loans for banks and insurers jumped 58% ^[1].
• Property sales volume fell 25% to about $3.5 billion ^[1].
• The servicing portfolio, which pays steady fees, grew 5% to $146.6 billion ^[1].

But the cleanup is not finished. The repurchased loans still carry $76.9 million on the books, and future losses depend on what buyers pay ^[1]. Simply Wall St noted the board still declared a $0.68 quarterly dividend despite the loss, a tradeoff income investors will weigh ^[2]. Walker said the Fannie Mae fraud review is complete and he expects no further buybacks ^[1].

What it means for you

Agency money got scarcer: the release says Fannie Mae and Freddie Mac lending fell 30% across the market this quarter ^[1]. Borrowers are turning to banks and insurers instead. Rates matter too. By our math, the 84 basis point rise in the 10-year Treasury, if passed through fully, adds about $42,000 a year in interest on a $5 million apartment loan.

Zoom out

Walker points to nearly $1 trillion of multifamily loans maturing over the next four years ^[1]. That refinancing wave will test whether owners can handle today's rates.