Walker & Dunlop's Q4 2024: Unpacking Contradictions in Fannie Mae Performance, Asset Management Strategy, and GSE Operations

These are the key contradictions discussed in Walker & Dunlop's latest 2024Q4 earnings call, specifically including: Fannie Mae Business Performance, Asset Management Strategy, GSE Policies and Operations, and Focus on Partnership and Independent Growth:



Strong Financial Performance and Transaction Volume:
- Walker & Dunlop reported total transaction volume of $13.4 billion for Q4 2024, an up 45% year-over-year increase, generating diluted earnings per share of $1.32, also up 42%.
- The growth was driven by an increase in agencies loan originations and a strong finish to the year despite a challenging macroeconomic backdrop.

Fannie Mae and Freddie Mac Lending:
- Q4 saw Fannie Mae lending surge with $3.2 billion, up 91% from Q4 2023, and Freddie Mac lending grew by 19% to $1.6 billion.
- Walker & Dunlop finished as the largest DUS partner for Fannie Mae for the sixth consecutive year, reflecting a strong partnership with the GSEs.

Property Sales and Investment Banking:
- The company achieved $3.5 billion in property sales transactions in Q4, up 20% year-over-year, and originated $5.2 billion with Freddie Mac.
- This was supported by a strong multifamily financing market and the integration of new investment banking capabilities.

Challenges and Credit Risk Management:
- Walker & Dunlop implemented new process controls and a new Asset Management group due to credit buybacks from GSEs, with five loans repurchased at an original principal balance of $87 million.
- This was attributed to changes in workflows post-pandemic and the sheer volume of business, leading to mistakes in underwriting and quality control.