Walker & Dunlop to Buy $3.8B HUD Servicing Portfolio

The commercial mortgage servicing portfolio was sold by Oppenheimer Multifamily Housing & Healthcare Finance, a subsidiary of Oppenheimer Holdings.
Willy Walker, Walker & Dunlop Chairman and CEO

Willy Walker, Walker & Dunlop Chairman and CEO

Bethesda, Md.—Walker & Dunlop Inc. has agreed to purchase the commercial mortgage servicing rights for a $3.8 billion servicing portfolio from Oppenheimer Multifamily Housing & Healthcare Finance Inc. a subsidiary of Oppenheimer Holdings Inc.

The portfolio consists of more than 480 multifamily and healthcare loans insured by the U.S. Department of Housing and Urban Development. The acquisition, which is expected to close on June 20, reportedly will make Walker & Dunlop, headquartered in Bethesda, Md., the nation’s largest HUD multifamily/healthcare servicer.

The company will be using available capital to fund the purchase price of about $45 million.

“In 2012, Walker & Dunlop set a goal to increase the proportion of revenues that comes from servicing and other non-transaction based fees,” Stephen Theobald, the company’s CFO, commented in a prepared statement.

“Over the past several years, the servicing portfolio has seen steady growth with the value of its revenue streams becoming increasingly apparent in the financial stability and flexibility provided to the business. The opportunity to acquire a portfolio of this size is rare and our strong cash position allowed us to move quickly to accelerate the accomplishment of our goal.”

A W&D spokesperson was unable to provide Commercial Property Executive with requested additional information.

Founded in 1937, Walker & Dunlop was taken public in late 2010 by current chairman and CEO Willy Walker. Since then, W&D has acquired and integrated four other companies.

A profile of Walker in The Washington Post last September noted that since going public, the company has tripled its revenue and increased its net income to $51 million in 2014, while the stock price rose by 140 percent.

The company’s servicing portfolio reportedly totals almost 5,000 mortgages and about $50 billion, predominantly on multifamily properties with high debt service coverage.