Walker & Dunlop Posts $37.3 Million Quarterly Loss After $56 Million Markdown On Repurchased Loans
The lender reclassified its repurchased loans for sale, targets an exit by early 2027, and says Fannie Mae has finished its fraud review.
Walker & Dunlop, which originates, sells and services multifamily and other commercial real estate loans, lost $37.3 million in the third quarter, or $1.15 per diluted share, after marking down repurchased loans it now wants to sell by early 2027. The company said Thursday that Fannie Mae has finished its fraud review of the firm, and it expects no more buybacks or indemnifications tied to those investigations.
A $63 million repurchase hit
Inside the Servicing & Asset Management segment, the company booked $63 million of repurchase-related charges: $56 million of non-cash valuation adjustments and $7 million of operating expenses. The segment lost $12 million, against net income of $37 million a year earlier.
The company reclassified all repurchased assets and non-performing notes as held for sale. The repurchased portfolio now carries at $76.9 million, and about $25 million of it is already under a letter of intent. During the quarter it sold $39.4 million of repurchased loans at prices near their second-quarter carrying values, leaving $164.8 million of repurchased loans at September 30, before the markdown, down from $221.6 million at the end of 2025.
CEO Willy Walker said the aim is to put the legacy credit problems "firmly behind us." He said the borrower fraud issues have "consumed us" for two years. Most of the loans sit with a small number of sponsors tied to the earlier fraud cases, and later price adjustments will depend on final sale prices versus current estimates, the company said.
Revenue slips as brokered deals grow
Total revenue of $298.4 million fell 12% from the third quarter of 2025. The company tied the drop to lower transaction volumes and a bigger share of brokered deals compared with lending through the government-sponsored mortgage firms. Adjusted core earnings per share of $0.92 fell 25%, which the company attributed to lower revenue and higher costs within the repurchased portfolio.
Debt financing volume fell 5% to $10.3 billion, as brokered volume rose 58% while Fannie Mae volume fell 40% and Freddie Mac volume fell 63%. Walker said a rise of 84 basis points in the ten-year Treasury rate slowed activity. Year-to-date GSE market share rose 290 basis points to 13.7%.
The servicing portfolio reached $146.6 billion at September 30, up 5% from a year earlier. Capital Markets earned $11 million, down from $28 million.
Dividend and the call
The board declared a fourth-quarter dividend of $0.68 per share, payable December 4 to holders of record on November 20. Walker said the company reorganized and cut staff in the quarter, and is focusing on multifamily, where he sees nearly $1 trillion of loans maturing over the next four years. The earnings call was set for 8:30 a.m. ET Thursday.
The company's closing share price at September 30 was $35.11, down from $54.70 at the end of June.
Sources
- 8-K Filing — Walker & Dunlop, Inc. (WD) — SEC EDGAR
- Exhibit wd-ex99d1.htm — Walker & Dunlop, Inc. 8-K exhibit — SEC EDGAR
- Walker & Dunlop Reports Third Quarter 2026 Financial Results — businesswire.com
