Walker & Dunlop is ready to move on from the investigations brought by Fannie Mae and Freddie Mac that led to repurchasing fraudulent loans and significant quarterly losses over the last year.
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The Maryland-based company announced in its third-quarter earnings call Thursday that Fannie and Freddie conducted and concluded their investigations and it doesn’t expect further loan buybacks or losses, CEO Willy Walker said on the call.
"After months of investigations and loan-level analysis across our portfolio, it is extremely reassuring to know that both investigations are complete, yet we are still managing the real estate and notes that we repurchased over the past two years," Walker said.
"Those assets have required significant ongoing investment and quarterly marks that were going to impact Walker & Dunlop’s earnings potential for many quarters to come."
W&D's total revenue fell 12% year-over-year to $298.4M, and debt volumes declined 5%, according to a release on the company's third-quarter results.
The decrease is in line with the 11% decline in transaction volume, primarily due to a higher portion of brokered transactions at a lower fee.
Shares were down less than a percentage point to $38.28 on Thursday morning, but they are down nearly 35% year to date.
W&D originates loans and sells them to Freddie and Fannie. It is so active in the space that it has become the largest Fannie multifamily lender.
In December 2025, Freddie asked the commercial real estate finance and advisory services firm to investigate $100M across two loan portfolios because of fraudulent documentation submitted by the borrower, The Real Deal reported.
W&D's internal investigation found that three portfolios totaling roughly $134M in Freddie Mac loans were impacted by fraud.
The findings led to the company recording a $29M loss expense and firing members of its banking staff in February after finding they didn’t adhere to its loan origination process and failed to detect fraudulent behavior.
Originators are typically responsible for covering legal costs and repurchasing the loans when fraud is detected. W&D negotiated an agreement with Freddie Mac over a $50.7M portfolio, delaying its repurchase through the end of 2027. The remaining two portfolios totaling $83.6M were still under negotiation.
It is unclear where negotiations stand now.
In the second quarter, W&D reported $23.2M of operating and credit-related charges tied to defaults on loans it repurchased and an agreement to cover a greater share of losses on nearly $16M in defaulted Fannie Mae loans, according to a release.
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