Bethesda, Md.—According to Walker & Dunlop Inc., its servicing portfolio has surpassed $60 billion of commercial mortgage loans. The company cites strong loan originations, limited payoffs, and the acquisition of a loan servicing portfolio in June as drivers for a rapidly increasing portfolio. The company has grown its portfolio from $50 billion to $60 billion in less than 11 months.
“Record second- and third-quarter earnings were driven by outstanding loan origination volumes,” noted Willy Walker, Walker & Dunlop’s chairman & CEO. “Every $10 billion of servicing adds roughly $26 million of high margin revenue to W&D each year.”
As the end of 3Q, Walker & Dunlop’s servicing portfolio contained over 5,400 loans with a weighted average servicing fee of 26 bps and a weighted average remaining life of 10.5 years. About 87 percent of the portfolio’s servicing fees are prepayment protected, meaning should the borrower decide to prepay the loan, Walker & Dunlop is compensated for all future servicing fees.
Also, the company pointed out, the servicing portfolio has an exceptional credit track record. Not a single loan has been 60 days delinquent in the at-risk portfolio for six consecutive quarters. The company’s operating subsidiary, Walker & Dunlop LLC, is a rated Primary Servicer by Fitch with a rating of CPS2.
The company is prospering in a time of continued growth for real estate lending. According to the latest Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage loan originations for the first nine months of 2016 increased 2 percent compared to the same period last year.
Moreover, third quarter 2016 commercial and multifamily mortgage loan originations were 5 percent higher than the third quarter of 2015 and 7 percent higher than the second quarter of 2016, the MBA reported. Rising property values, robust property fundamentals, low interest rates and a strong transaction market continue to drive potentially record-setting paces in commercial and multifamily mortgage originations, explained Jamie Woodwell, MBA’s vice president of commercial real estate research.