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What changed in Walker & Dunlop, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Walker & Dunlop, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+477 added−484 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-22)

Top changes in Walker & Dunlop, Inc.'s 2024 10-K

477 paragraphs added · 484 removed · 353 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

86 edited+16 added−23 removed69 unchanged
Biggest changeThe following table summarizes our key human capital metrics over the last two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, Human Capital Metric: ​ 2023 2022 Overall ​ ​ ​ ​ ​ ​ Voluntary annualized turnover rate ​ ​ 8% ​ ​ 11% Average tenure (years) ​ ​ 4.7 ​ ​ 3.8 Diversity ​ ​ ​ ​ ​ ​ Percent of women employees ​ ​ 35% ​ ​ 36% Percent of women employees in management positions (1) ​ ​ 28% ​ ​ 28% Percent of employees from underrepresented racial/ethnic groups ​ ​ 22% ​ ​ 22% Percent of employees from underrepresented racial/ethnic groups in management positions (1) ​ ​ 14% ​ ​ 13% (1) Defined as Assistant Vice President and above. ​ We are purposeful in our drive to promote an inclusive workplace, where our employees are engaged and can develop within the Company.
Biggest changeWe evaluate demographic talent metrics and report to management monthly on hiring, turnover, promotions, and other metrics. ​ The following table summarizes our key human capital metrics over the last two years: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, Human Capital Metrics: ​ 2024 2023 Voluntary annualized turnover rate ​ ​ 8% ​ ​ 8% Average tenure (years) ​ ​ 5.0 ​ ​ 4.7 ​ Health and Safety We promote the health, safety, and wellness of our employees.
Our services include (i) multifamily lending, property sales, appraisal, valuation, and research, (ii) commercial real estate debt brokerage and advisory services, (iii) investment management, and (iv) affordable housing lending, tax credit syndication, development, and investment.
Our services include (i) multifamily lending, property sales, appraisal, valuation, and research, (ii) commercial real estate debt brokerage and advisory services, (iii) investment management, and (iv) affordable housing lending, property sales, tax credit syndication, development, and investment.
The loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net for these transactions reflect the fair value attributable to loan origination fees and premiums on the sale of loans, net of any co-broker fees, and the fair value of the expected net cash flows associated with servicing the loans, net of any guaranty obligations retained. ​ We generally fund our Agency loan products through warehouse facility financing and sell them to investors in accordance with the related loan sale commitment, which we obtain concurrent with rate lock.
The loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net for these transactions reflect the fair value attributable to loan origination fees, premiums on the sale of loans, net of any co-broker fees, and the fair value of the expected net cash flows associated with servicing the loans, net of any guaranty obligations retained. ​ We generally fund our Agency loan products through warehouse facility financing and sell them to investors in accordance with the related loan sale commitment, which we obtain concurrent with rate lock.
The primary services within SAM are described below. ​ Loan Servicing ​ We retain servicing rights and asset management responsibilities on substantially all of our Agency loan products that we originate and sell and generate cash revenues from the fees we receive for servicing the loans, from placement fees on escrow deposits held on behalf of borrowers, and from other ancillary fees relating to servicing the loans.
The primary services within SAM are described below. ​ Loan Servicing ​ We retain servicing rights and asset management responsibilities on substantially all of our Agency loan products that we originate and sell and generate cash revenues from the fees we receive for servicing the loans, from the placement fees on escrow deposits held on behalf of borrowers, and from other ancillary fees relating to servicing the loans.
We continue to compete for market share, leverage our prior acquisitions and recruiting of property sales brokerage professionals to continue developing new product offerings and enter new markets to help achieve our $25 billion property sales goal by 2025, while also increasing our opportunities to finance the properties for which we broker a sale. ● Establish Investment Management Capabilities with a goal to reach $10 billion in assets under management by building on our existing capabilities and developing new capabilities to meet more of our client’s needs.
We continue to compete for market share, leverage our prior acquisitions and recruiting of property sales brokerage professionals to continue developing new product offerings and enter new markets to help achieve our $25 billion property sales goal, while also increasing our opportunities to finance the properties for which we broker a sale. ● Establish Investment Management Capabilities with a goal to reach $10 billion in assets under management by building on our existing capabilities and developing new capabilities to meet more of our client’s needs.
Our clients are owners and developers of multifamily properties and other commercial real estate assets across the country. We also underwrite, service, and asset-manage shorter-term loans on commercial real estate. Most of these shorter-term loans are closed through a joint venture or through separate accounts managed by our investment management subsidiary, Walker & Dunlop Investment Partners, Inc. (“WDIP”).
Our clients are owners and developers of multifamily properties and other commercial real estate assets across the country. We also underwrite, service, and asset-manage shorter-term loans on transitional commercial real estate. Most of these shorter-term loans are closed through a joint venture or through separate accounts managed by our investment management subsidiary, Walker & Dunlop Investment Partners, Inc. (“WDIP”).
Our cost of borrowing frequently can exceed the note rate on the loan, resulting in a net interest expense. ​ Our loan commitments and loans held for sale are currently not exposed to unhedged interest rate risk during the loan commitment, closing, and delivery process.
Our cost of borrowing can exceed the note rate on the loan, resulting in a net interest expense. ​ Our loan commitments and loans held for sale are currently not exposed to unhedged interest rate risk during the loan commitment, closing, and delivery process.
We earn servicing fees for overseeing the loans in our servicing portfolio and asset management fees for the capital invested in our funds. Additionally, we earn revenue through net interest income on the loans and the warehouse interest expense for loans held for investment.
We earn servicing fees for overseeing the loans in our servicing portfolio and asset management fees for the capital invested in our funds. Additionally, we earn revenue through net interest income on the loans held for investment and the associated warehouse interest expense.
The major other corporate-level functions include our equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups. ​ 9 Table of Contents Our Growth Strategy In 2020, the Company implemented a strategy to reach $2 billion of total annual revenues by the end of 2025 by accomplishing the following milestones: (i) at least $60 billion of annual debt financing volume, (ii) at least $5 billion of annual small balance multifamily debt financing volume, (iii) annual property sales volume of at least $25 billion, (iv) an unpaid principal balance of at least $160 billion in our servicing portfolio, and (v) at least $10 billion of assets under management.
Other major corporate-level functions include our equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups. ​ Our Growth Strategy In 2020, the Company implemented a strategy to reach $2 billion of total annual revenues by the end of 2025 by accomplishing the following milestones: (i) at least $60 billion of annual debt financing volume, (ii) at least $5 billion of annual small balance multifamily debt financing volume, (iii) annual property sales volume of at least $25 billion, (iv) an unpaid principal balance of at least $160 billion in our servicing portfolio, and (v) at least $10 billion of assets under management.
For more information regarding our risk-sharing agreements with Fannie Mae, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Quality and Allowance for Risk-Sharing Obligations” below. Most of the Fannie Mae loans that we originate are sold in the form of a Fannie Mae-guaranteed security to third-party investors.
For more information regarding our risk-sharing agreements with Fannie Mae, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Quality and Allowance for Risk-Sharing Obligations” below. Most of the Fannie Mae loans that we originate are sold in the form of a single loan Fannie Mae-guaranteed security to third-party investors.
We conduct the majority of our operations through Walker & Dunlop, LLC, our operating company. ​ Segments ​ Our executive leadership team, which functions as our chief operating decision making body, makes decisions and assesses performance based on the following three reportable segments: (i) Capital Markets (“CM”), (ii) Servicing & Asset Management (“SAM”), and (iii) Corporate.
We conduct the majority of our operations through Walker & Dunlop, LLC, our operating company. ​ Segments ​ Our executive leadership team, which functions as our chief operating decision making body, makes decisions and assesses performance based on the following three reportable segments: (i) Capital Markets, (ii) Servicing & Asset Management, and (iii) Corporate.
Our long-established relationships with the Agencies and institutional investors enable us to offer a broad range of loan products and services to our customers. We provide property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various investors. Additionally, we earn subscription fees for our housing related research.
Our long-established relationships with the Agencies and institutional investors enable us to offer a broad range of loan products and services to our customers. We provide property sales services to owners and developers of multifamily and hospitality properties and commercial real estate appraisals for various lenders and investors. Additionally, we earn subscription fees for our housing related research.
The segments and related services are described in the following paragraphs. ​ Capital Markets ​ Capital Markets provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, appraisal and valuation services, and real estate-related investment banking and advisory services, including housing market research.
The segments and related services are described in the following paragraphs. ​ Capital Markets (“CM”) ​ CM provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, appraisal and valuation services, and real estate-related investment banking and advisory services, including housing market research.
The sale or placement of each loan to an investor is negotiated at the same time we establish the coupon rate for the loan. We also seek to mitigate the risk of a loan not closing by collecting good faith deposits from the borrower. The deposit is returned to the borrower only once the loan is closed.
The sale or placement of each loan to an investor is negotiated at the same time we establish the coupon rate for the loan. We also seek to mitigate the risk of a loan not closing by collecting good faith deposits from the borrower. The deposit is only returned to the borrower after the loan is closed.
The joint venture funds its operations using a combination of equity contributions from its owners and third-party credit facilities. We hold a 15% ownership interest in the Interim Program JV and are responsible for sourcing, underwriting, servicing, and asset-managing the loans originated by the joint venture.
The joint venture funded its operations using a combination of equity contributions from its owners and third-party credit facilities. We hold a 15% ownership interest in the Interim Program JV and are responsible for sourcing, underwriting, servicing, and asset-managing the loans originated by the joint venture.
Freddie Mac —We are one of 24 lenders approved as a Freddie Mac lender, where we originate and sell to Freddie Mac multifamily, manufactured housing communities, student housing, affordable housing, seniors housing loans, and small balance loans that satisfy Freddie Mac’s underwriting and other eligibility requirements.
Freddie Mac —We are one of 23 lenders approved as a Freddie Mac lender, where we originate and sell to Freddie Mac multifamily, manufactured housing communities, student housing, affordable housing, seniors housing loans, and small balance loans that satisfy Freddie Mac’s underwriting and other eligibility requirements.
We very rarely have any risk-sharing arrangements on loans we sell to Freddie Mac under its program.
We rarely have any risk-sharing arrangements on loans we sell to Freddie Mac under its program.
For brokered loans we also service, we collect ongoing servicing fees while those loans remain in our servicing portfolio.
For brokered loans that we also service, we collect ongoing servicing fees while those loans remain in our servicing portfolio.
We have increased the number of property sales brokers and the geographical reach of our investment sales platform over the past several years through hiring and acquisitions and intend to continue this expansion in support of our growth strategy.
We have increased the number of property sales brokers and the geographical reach of our investment sales platform over the past several years through hiring and acquisitions and intend to continue this expansion in support of our growth strategy, geographical reach, and service offerings.
WDAE is one of the largest tax credit syndicators and affordable housing developers in the U.S. and provides alternative investment management services focused on the affordable housing sector through LIHTC syndication, development of affordable housing projects through joint ventures, and affordable housing preservation fund management.
WDAE is one of the largest tax credit syndicators and affordable housing developers in the U.S. and provides alternative investment management services focused on the affordable housing sector through LIHTC syndication and development of affordable housing projects through joint ventures.
We offer competitive wages, health and insurance benefits, paid time off, various leave programs, a service awards program ranging from $2,000 to $25,000 for three to 40 years of service, a 401(k) Company match, wellness benefits, and health savings plans. We benchmark our total rewards programs at least annually and regularly conduct pay equity analyses.
We offer competitive wages, health and insurance benefits, paid time off, various leave programs, a service awards program ranging from $2,000 to $25,000 for three to 40 years of service, a 401(k) Company match, wellness benefits, and health savings plans. We benchmark our total rewards programs and conduct pay equity analyses regularly.
We earn net warehouse interest income from loans held for sale while they are outstanding equal to the difference between the note rate on the loan and the cost of borrowing of the warehouse facility.
We earn net warehouse interest income or expense from loans held for sale while they are outstanding equal to the difference between the note rate on the loan and the cost of borrowing of the warehouse facility.
We are not obligated to make advances on the loans we service u nder the Freddie Mac Optigo® program and our bank and life insurance company servicing agreements. ​ Under the Ginnie Mae program, we are obligated to advance tax and insurance escrow amounts and principal and interest payments on the Ginnie Mae securities until the Ginnie Mae security is fully paid.
We are not obligated to make advances on the loans we service u nder the Freddie Mac Optigo® program or our bank and life insurance company servicing agreements. ​ Under the Ginnie Mae program, we are obligated to advance tax and insurance escrow shortfalls and principal and interest payments on the Ginnie Mae securities until the Ginnie Mae security is fully paid.
Lastly, we require a letter of intent giving us the exclusive right to invest in the LIHTC investment. Corporate ​ The Corporate segment consists primarily of our treasury operations and other corporate-level activities. Our treasury operations include monitoring and managing our liquidity and funding requirements, including our corporate debt.
Lastly, we require a letter of intent giving us the exclusive right to invest in the LIHTC investment. Corporate ​ 9 Table of Contents The Corporate segment consists primarily of our treasury operations and other corporate-level activities. Our treasury operations include monitoring and managing our liquidity and funding requirements, including our corporate debt.
Details and results of our ongoing 10 Table of Contents ESG efforts are provided in our annual ESG report on our website. See more discussions about our human capital strategy in the “Human Capital Resources” section below . Competition We compete in the commercial real estate services industry.
Details and results of our ongoing ESG efforts are provided in our annual ESG report on our website. See more discussions about our human capital strategy in the “Human Capital Resources” section below . Competition We compete in the commercial real estate services industry.
Through our subsidiary, WDAE, we are the eighth largest LIHTC syndicator in the country. Competitors in this fragmented but highly competitive industry include but are not limited to: Boston Financial Investment Management, L.P., Raymond James & Associates, Inc., Enterprise Community Partners, Inc., The Richman Group Affordable Housing Corporation, National Equity Fund, Inc., and PNC Real Estate.
We are the eighth largest LIHTC syndicator in the country. Competitors in this fragmented but highly competitive industry include but are not limited to: Boston Financial Investment Management, L.P., Raymond James & Associates, Inc., Enterprise Community Partners, Inc., The Richman Group Affordable Housing Corporation, National Equity Fund, Inc., and PNC Real Estate.
To reach these milestones in 2025, or some later date, we remain focused on the following areas: ● Grow Debt Financing Volume to $65 billion annually, including $5 billion of annual small balance multifamily lending, with a servicing portfolio of $160 billion by continuing to hire and acquire the best mortgage bankers in the industry, leveraging our brand to continue growing our client base, and leveraging proprietary technology to be more insightful and relevant to our clients.
To reach these milestones beyond 2025, we remain focused on the following areas: ● Grow Debt Financing Volume to $65 billion annually, including $5 billion of annual small balance multifamily lending, with a servicing portfolio of $160 billion by continuing to hire and acquire the best mortgage bankers in the industry, leveraging our brand to continue growing our client base, and leveraging proprietary technology to be more insightful and relevant to our clients.
We receive a sales commission for brokering the sale of these multifamily assets on behalf of our clients, and we often are able to provide financing to the purchaser of the properties through our Agency or debt brokerage teams.
We receive a sales commission for brokering the sale of these assets on behalf of our clients, and we often are able to provide financing for the purchaser of the properties through our Agency or debt brokerage entities.
We face significant competition across our business, including, but not limited to, commercial real estate services subsidiaries of large national commercial banks, privately-held and public commercial real estate service providers, CMBS conduits, public and private real estate investment trusts, private equity, investment funds, and insurance companies, some of which are also investors in loans we originate.
We face significant competition across our business, including, but not limited to, commercial real estate services subsidiaries of large national commercial banks, privately-held and public commercial real estate service providers, Commercial Mortgage-Backed Security (“CMBS”) conduits, public and private real estate investment trusts, private equity, investment funds, and insurance companies, some of which are also investors in loans we originate.
These rules and regulations cover, among other things, sales practices, fee arrangements, disclosures to clients, capital adequacy, use and safekeeping of clients’ funds and securities, recordkeeping and reporting and the qualification and conduct of officers, employees and independent contractors. Broker-dealers are subject to periodic inspection and examination by the SEC and FINRA.
These rules and regulations cover, among other things, sales practices, fee arrangements, disclosures to clients, capital adequacy, use and safekeeping of clients’ funds, and securities, Material Non-Public Information (“MNPI”), recordkeeping and reporting and the qualification and conduct of officers, employees and independent contractors. Broker-dealers are subject to periodic inspection and examination by the SEC and FINRA.
We are a leader in commercial real estate technology through development and acquisition of technology resources that (i) provide innovative solutions and a better experience for our customers, (ii) allow us to drive efficiencies across our internal processes, and (iii) allow us to accelerate the growth of our small-balance lending business and our appraisal platform, Apprise. ​ Walker & Dunlop, Inc. is a holding company.
We are a leader in commercial real estate technology through developing and acquiring of technology resources that (i) provide innovative solutions and a better experience for our customers, (ii) allow us to drive efficiencies across our internal processes, and (iii) allow us to accelerate the growth of our small-balance lending business and our appraisal platform, Apprise by Walker & Dunlop (“Apprise”). ​ Walker & Dunlop, Inc. is a holding company.
Correspondent Network —In addition to our originators, as of December 31, 2023, we had correspondent agreements with 23 independently owned loan originating companies across the country with which we have relationships for Agency loan originations.
Correspondent Network —In addition to our originators, as of December 31, 2024, we had correspondent agreements with 22 independently owned loan originating companies across the country with which we have relationships for Agency loan originations.
The servicing fees we typically earn on brokered loan transactions are substantially lower than the servicing fees we earn on Agency loans. ​ Investment Management and Principal Lending and Investing Investment Management— Through our subsidiary, WDIP, we serve as a private commercial real estate investment advisor focused on the management of debt, preferred equity, and mezzanine equity investments in middle-market commercial real estate funds.
The servicing fees we typically earn on brokered loan transactions are lower than the servicing fees we earn on Agency loans. ​ Investment Management and Principal Lending and Investing Investment Management— Through our investment management subsidiary, WDIP, we function as the operator of a private commercial real estate investment adviser focused on the management of debt, preferred equity, and mezzanine equity investments in middle-market commercial real estate funds.
Although we have already achieved this goal, we will continue to seek to grow our AUM, including in other areas of commercial real estate, as we are routinely asked by our clients to help them raise more complex capital solutions.
Although we have already achieved this goal, primarily through the acquisition of WDAE, we will continue to seek to grow our AUM, including in other areas of commercial real estate, as we are routinely asked by our clients to help them raise more complex capital solutions.
We engage in the development and preservation of affordable housing projects through joint ventures with real estate developers and the management of funds focused on affordable housing. We provide housing market research and real estate-related investment banking and advisory services, which provide our clients and us with market insight into many areas of the housing market.
We engage in the development of affordable housing projects through joint ventures with real estate developers. We provide housing market research and real estate-related investment banking and advisory services, which provide our clients and us with market insight into many areas of the housing market.
Our affordable housing investment management team works with our developer clients to identify properties that will generate LIHTCs and meet our affordable investors’ needs, and forms limited partnership funds (“LIHTC funds”) with third-party investors that invest in the limited partnership interests in these properties.
Our affordable housing investment management team works with our developer clients to identify properties that will generate LIHTCs and meet our affordable investors’ needs, and forms limited partnership funds (“LIHTC funds”) with third-party investors that invest in the limited partnership interests in these properties and earns a syndication fee for these services.
If the loan is not brought current, or the loan otherwise defaults, we are not reimbursed for our advances until such time as we assign the loan to HUD or work out a payment modification for the borrower.
If the loan is not brought current, or the loan otherwise defaults, we are not reimbursed for our advances until such time as we assign the loan to HUD and file a claim for mortgage insurance benefits or work out a payment modification for the borrower.
In addition, the 11 Table of Contents Agencies have the authority under their guidelines to terminate a lender's authority to sell loans to them and service their loans.
In addition, the Agencies have the authority under their guidelines to terminate a lender's authority to sell loans to them and service their loans.
Additionally, WDAE also invests with third-party investors (either in a fund or joint-venture structure) with the goal of preserving affordability on multifamily properties coming out of the LIHTC 15-year compliance period or on which market forces are unlikely to keep the properties affordable.
Additionally, WDAE invests with third-party investors (either in a fund or joint-venture structure) with the goal of preserving affordability on multifamily properties coming out of the LIHTC 15-year compliance period or on which market forces are unlikely to keep the properties affordable. ​ We advance funds to our joint venture developer partners in connection with our LIHTC operations.
While we remain committed to these goals and believe that macroeconomic and industry conditions will recover over the coming years, we may not achieve these milestones.
While we remain committed to our strategy and these goals and believe that macroeconomic and industry conditions will recover over the coming years, we will likely not achieve these milestones in 2025.
Additionally, as we expand into new operations, we likely will face new regulatory requirements applicable to such operations. For example, our expansion into LIHTC syndication and broker-dealer activities in 2021, as a result of the Alliant and Zelman acquisitions, has subjected us to new regulatory requirements.
Additionally, as we expand into new operations, we likely will face new regulatory requirements applicable to such operations. For example, our expansion into LIHTC syndication and broker-dealer activities in 2021 subjected us to new regulatory requirements.
For most loans we service under the Fannie Mae DUS program, we are required to advance the principal and interest payments and guarantee fees for four months should a borrower cease making payments under the terms of their loan, including while that loan is in forbearance.
For loans serviced outside of Fannie Mae or Freddie Mac, we typically do not have similar prepayment protections. ​ For most loans we service under the Fannie Mae DUS program, we are required to advance the principal and interest payments and guarantee fees for four months should a borrower cease making payments under the terms of their loan, including while that loan is in forbearance.
We will continue to scale our AUM through WDIP and WDAE with a specific focus on raising third-party capital to grow those businesses to meet the diverse capital needs of our clients. ● Remain a leader in Environmental, Social, and Governance (“ESG”) efforts by increasing the percentage of women and minorities within the ranks of our top earners and senior management, remaining carbon neutral while reducing our emissions intensity, and donating 1% of our annual income from operations to charitable organizations.
We will 10 Table of Contents continue to scale our AUM through WDIP and WDAE with a specific focus on raising third-party capital to grow those businesses to meet the diverse capital needs of our clients. ● Remain a leader in Environmental, Social, and Governance (“ESG”) efforts by financing affordable housing properties, remaining carbon neutral while reducing our emissions intensity, and donating 1% of our annual income from operations to charitable organizations.
We also offer paid time off for employees to volunteer in their communities, in addition to Company-sponsored volunteer events, and provide a matching fund program where we match employees’ eligible charitable contributions and/or time spent volunteering up to $2,000.
We also offer paid time off for employees to volunteer in their communities, in addition to Company-sponsored volunteer events, and provide a matching fund program where we match employees’ eligible charitable contributions and/or time spent volunteering up to $2,000. In addition, we support the development and advancement of our employees and provide reimbursements for certain professional certifications and higher education.
Through joint ventures with an affiliate of Blackstone Mortgage Trust, Inc., WDIP also offers short-term senior secured debt financing products that provide floating-rate, interest-only loans for terms of generally up to three years to experienced borrowers seeking to acquire or reposition multifamily properties that do not currently qualify for permanent financing (the “Interim Program JV” or the “joint venture”).
Principal Lending and Investing— Through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., the Company offered short-term senior secured debt financing products that provided floating-rate, interest-only loans for terms of generally up to three years to experienced borrowers seeking to acquire or reposition multifamily properties that did not qualify for permanent financing (the “Interim Program JV” or the “joint venture”).
During the past two years, we maintained a large number of bankers and brokers focused on debt financing transactions across the United States to stand ready to capture additional market share as macroeconomic conditions begin to stabilize. ● Grow Property Sales Volume to $25 billion annually by leveraging the strengths of our current team, growing volumes within our current markets and continuing to build out our brand and footprint nationally by hiring brokers in new geographic markets and brokers who specialize in different multifamily product types.
Despite the disruption of the past two years, we maintained a large number of the bankers and brokers that delivered $43.6 and $48.9 billion of debt financial volume in 2022 and 2021, respectively, and that group remains focused on debt financing transactions across the United States as macroeconomic conditions begin to stabilize and recover. ● Grow Property Sales Volume to $25 billion annually by leveraging the strengths of our current team, growing volumes within our current markets and continuing to build out our brand and footprint nationally by hiring brokers in new geographic markets and brokers who specialize in different multifamily product types.
Accordingly, loans originated in the past may have been subject to modified risk-sharing at lower levels. Our servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are larger than the servicing fees we would receive from Fannie Mae for loans with no risk-sharing obligations. We receive a lower servicing fee for modified risk-sharing than for full risk-sharing.
Our servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are larger than the servicing fees we would receive from Fannie Mae for loans with no risk-sharing obligations. We receive a lower servicing fee for modified risk-sharing than for full risk-sharing.
We outsource some of our servicing activities to third parties. Our Fannie Mae servicing arrangements generally provide for prepayment protection in the event of a voluntary prepayment. For loans serviced outside of Fannie Mae, we typically do not have similar prepayment protections.
We outsource some of our servicing activities to third parties. Our Fannie Mae servicing arrangements generally provide for prepayment protection to us in the event of a voluntary prepayment.
Human Capital Resources ​ As of December 31, 2023, we had a total of 1,326 employees, a 9% decrease from the prior year, including a net reduction of five bankers and brokers.
Human Capital Resources ​ As of December 31, 2024, we had a total of 1,399 employees, a 6% increase from the prior year, including a net reduction of three bankers and brokers.
We continue to defend our market share in the multifamily financing market, with a 7.5% share in 2023.
We continue to defend our market share in the multifamily financing market, with an 8.5% share in 2024.
Ginnie Mae securities are backed by the full faith and credit of the United States, and we very rarely bear any risk of loss on Ginnie Mae securities.
Ginnie Mae is a United States government corporation in the United States Department of Housing and Urban Development. Ginnie Mae securities are backed by the full faith and credit of the United States, and we rarely bear any risk of loss on Ginnie Mae securities.
We submit our completed loan underwriting package to HUD and obtain HUD's approval to originate the loan. We service and asset-manage all loans originated through HUD’s various programs. HUD-insured loans are typically placed in single loan pools which back Ginnie Mae securities. Ginnie Mae is a United States government corporation in the United States Department of Housing and Urban Development.
We submit our completed loan underwriting package to HUD and obtain HUD's approval to originate the loan after they have performed their own underwriting analysis. We service and asset-manage all loans originated through HUD’s various programs. HUD-insured loans are typically placed in single loan pools which back Ginnie Mae securities.
This disruption has also caused us to moderate our pace of investment in some areas of our business necessary to fully achieve these goals, including the number of technology professionals, salespeople, and amount of capital invested.
This disruption has led to a significant slowdown in debt financing, small balance lending, and property sales activity. This disruption has also caused us to moderate our pace of investment in some areas of our business necessary to fully achieve these milestones, including the number of technology professionals, salespeople, and amount of capital invested throughout our business.
The credit fund focuses on the same core product as the Interim Loan Program and Interim Program JV. The Company underwrites, services, and asset manages all loans originated for the credit fund and has only a 5% co-investment obligation.
Debt Fund I focuses on the same core product as the Interim Program JV, discussed more fully below. The Company underwrites, services, and asset manages all loans originated for the credit fund and has only a 5% co-investment obligation. The majority of the capital raised through Debt Fund I was deployed throughout 2024.
We underwrite, service, and asset-manage all loans executed through the Interim Loan Program. We originate and hold these Interim Loan Program loans for investment, which are included on our balance sheet, and during the time that these loans are outstanding, we assume the full risk of loss.
We originated and held these Interim Loan Program loans for investment, which were included on our balance sheet, and during the time that these loans were outstanding, we assumed the full risk of loss.
In addition to servicing substantially all of our Agency loan products, we also service our loans originated through the Interim Program and some of the loans we broker for institutional investors, primarily life insurance companies.
In addition to servicing substantially all of our Agency loan products, we also service some of the loans we broker for institutional investors, primarily life insurance companies. We may also occasionally leverage the scale of our servicing operation by acquiring the rights to service and asset-manage loans originated by others through direct portfolio acquisitions or entity acquisitions.
We believe our people, brand, and technology provide us with a competitive advantage, as evidenced by 69% of refinancing volumes coming from new loans to us and 22% of total transaction volumes coming from new customers for the year ended December 31, 2023. We are one of the largest service providers to multifamily operators in the country.
We believe our people, brand, and technology provide us with a competitive advantage, as evidenced by 72%, 69%, and 62% of refinancing volumes coming from new loans to us for the years ended December 31, 2024, 2023, and 2022, respectively.
The following table summarizes our progress towards these 2025 milestones. ​ ​ ​ ​ ​ ​ ​ Milestone ( in thousands ) ​ 2023 ​ 2025 Milestone Revenues ​ $ 1,054,440 ​ $ 2,000,000 Debt financing volume ​ ​ 24,202,859 ​ ​ 60,000,000 Small balance lending volume ​ ​ 634,280 ​ ​ 5,000,000 Property sales volume ​ ​ 8,784,537 ​ ​ 25,000,000 Servicing portfolio ​ ​ 130,471,524 ​ ​ 160,000,000 Assets under management ​ ​ 17,321,452 ​ ​ 10,000,000 ​ The macroeconomic environment since the middle of 2022, especially related to inflation, higher interest rates, and tighter liquidity, has disrupted the amount and timing of commercial real estate transaction activity.
The following table summarizes our progress towards these 2025 milestones. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Milestone ( in thousands ) 2021 ​ 2022 ​ 2023 ​ 2024 ​ 2025 Milestone Revenues $ 1,259,178 ​ $ 1,258,753 ​ $ 1,054,440 ​ $ 1,132,490 ​ $ 2,000,000 Debt financing volume ​ 48,911,120 ​ ​ 43,605,984 ​ ​ 24,202,859 ​ ​ 30,154,666 ​ ​ 60,000,000 Small balance lending volume ​ 515,757 ​ ​ 745,686 ​ ​ 634,280 ​ ​ 750,388 ​ ​ 5,000,000 Property sales volume ​ 19,254,697 ​ ​ 19,732,654 ​ ​ 8,784,537 ​ ​ 9,751,223 ​ ​ 25,000,000 Servicing portfolio ​ 115,700,564 ​ ​ 123,133,855 ​ ​ 130,471,524 ​ ​ 135,287,012 ​ ​ 160,000,000 Assets under management ​ 16,437,865 ​ ​ 16,748,449 ​ ​ 17,321,452 ​ ​ 18,423,463 ​ ​ 10,000,000 ​ The macroeconomic environment since the middle of 2022, especially related to inflation, elevated interest rates, and tighter liquidity, has disrupted the amount and timing of commercial real estate transaction activity in 2023 and 2024.
We believe third-party capital solutions, in the form of direct real estate investment or commingled funds, are a long-term growth opportunity for our servicing and asset management businesses, and we have steadily reduced our reliance on our own capital and warehouse debt financing to fund interim loans in order to focus on raising third-party capital solutions to meet market demand and pursue our asset management growth strategy.
We have steadily reduced our reliance on our own capital and warehouse debt financing to fund interim loans in order to focus on raising third-party capital solutions, like Debt Fund I and Debt Fund II, to meet market demand and pursue our investment management growth strategy.
WDAE serves as the general partner of these LIHTC funds, and it receives fees, such as asset management fees, and a portion of refinance and disposition proceeds as compensation for its work as the general partner of the fund.
WDAE serves as the general partner of these LIHTC funds, and it receives fees, such as asset management fees, and a portion of refinance and disposition proceeds as compensation for its work as the general partner of the fund. ​ We invest, as the managing or non-managing member of joint ventures, with developers of affordable housing projects that are partially funded through LIHTCs.
WDIP’s current regulatory assets under management (“AUM”) of $1.5 billion primarily consist of six sources: Fund III, Fund IV, Fund V, Fund VI, and Fund VII (collectively, the “Funds”), and separate accounts managed primarily for life insurance companies. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments.
WDIP’s current regulatory assets under management (“AUM”) of $2.3 billion primarily consist of eight investment vehicles: Fund III, Fund IV, Fund V, Fund VI, Fund VII, Debt Fund I, and Debt Fund II (collectively, the “Funds”), and separate accounts managed primarily for life insurance companies.
Zelman is a nationally recognized housing market research and investment banking firm that enhances the information we provide to our clients and increases our access to high-quality market insights in many areas of the housing market, including construction trends, demographics, housing demand and mortgage finance.
Our geographical reach now covers many major markets in the United States, and our service offerings now include sales of land, student, senior housing, hospitality, and affordable properties. 6 Table of Contents ​ Housing Market Research and Real Estate Investment Banking Services ​ Our subsidiary Zelman & Associates (“Zelman”), is a nationally recognized housing market research and investment banking firm that enhances the information we provide to our clients and increases our access to high-quality market insights in many areas of the housing market, including construction trends, demographics, housing demand and mortgage finance.
We have added property sales brokers over the past several years, and as of December 31, 2023, have 74 property sales brokers in various regions throughout the United States. We believe the multifamily investment sales market will recover as valuation spreads between buyers and sellers tighten, and market and economic conditions stabilize over the coming years.
We believe the multifamily investment sales market will recover as valuation spreads between buyers and sellers tighten, and market and economic conditions stabilize over the coming years.
Requirements of the Agencies To maintain our status as an approved lender for Fannie Mae and Freddie Mac and as a HUD-approved mortgagee and issuer of Ginnie Mae securities, we are required to meet and maintain various eligibility criteria established by the Agencies, such as minimum net worth, operational liquidity and collateral requirements, and compliance with reporting requirements.
We also are required to comply with certain provisions of, among other statutes and regulations, the USA PATRIOT Act, regulations promulgated by the Office of Foreign Asset Control, the Employee Retirement Income Security Act of 1974, as amended, which we refer to as “ERISA,” and federal and state securities laws and regulations. 11 Table of Contents Requirements of the Agencies To maintain our status as an approved lender for Fannie Mae and Freddie Mac and as a HUD-approved mortgagee and issuer of Ginnie Mae securities, we are required to meet and maintain various eligibility criteria established by the Agencies, such as minimum net worth, operational liquidity and collateral requirements, and compliance with reporting requirements.
We have experienced an immaterial number of failed deliveries in our history and have incurred immaterial losses on such failed deliveries. ​ As part of our overall growth strategy, we are focused on significantly growing and investing in our small-balance multifamily lending platform, which involves a high volume of transactions with smaller loan balances.
Private clients make up a substantial portion of the ownership of multifamily assets in the United States. As part of our overall growth strategy, we are focused on significantly growing and investing in our private client, or small-balance, multifamily lending platform, which involves a high volume of transactions with smaller loan balances.
Our website also includes a corporate governance section which contains our Corporate Governance Guidelines (which includes our Director Responsibilities and Qualifications), Code of Business Conduct and Ethics, Code of Ethics for Principal Executive Officer and Senior Financial Officers, Board of Directors’ Committee Charters for the Audit and Risk, Compensation, and Nominating and Corporate Governance Committees, Complaint Procedures for Accounting and Auditing Matters, and the method by which interested parties may contact our Ethics Hotline.
We make available free of charge, on or through our website, access to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such material is electronically filed, or furnished, to the SEC. 13 Table of Contents Our website also includes a governance section that contains our Corporate Governance Guidelines (which includes our Director Responsibilities and Qualifications), Code of Business Conduct and Ethics, Code of Ethics for Principal Executive Officer and Senior Financial Officers, Board of Directors’ Committee Charters for the Audit and Risk, Compensation, and Nominating and Corporate Governance Committees, Complaint Procedures for Accounting and Auditing Matters, and the method by which interested parties may contact our Ethics Hotline.
As part of our growth strategy, we have increased the number of investment bankers to broaden our reach and expertise within the residential housing, building products, multifamily and commercial real estate sectors. ​ Appraisal and Valuation Services ​ We offer multifamily appraisal and valuation services though our subsidiary, Apprise by Walker & Dunlop (“Apprise”) .
As part of our growth strategy, we have increased the number of investment bankers to broaden our reach and expertise within the residential housing, building products, Affordable, multifamily and commercial real estate sectors. Prior to the fourth quarter of 2024, we owned a 75% controlling interest in Zelman.
None of our employees are represented by a union or subject to a collective bargaining agreement, and we have never experienced a work stoppage. ​ Our human capital strategy is to create a valued culture that allows us to attract and retain the very best talent in our industry.
None of our employees are represented by a union or subject to a collective bargaining agreement, and we have never experienced a work stoppage. ​ Our human capital strategy is designed to create a great place to work for all of our employees. We believe a high trust culture drives stronger performance.
We regularly review our correspondent network to ensure they are meeting our requirements, including ethical standards. We may be obligated to repurchase loans that are originated for the Agencies’ programs if certain representations and warranties that we provide in connection with such originations are breached.
We have experienced an immaterial number of failed deliveries in our history and have incurred immaterial losses on such failed deliveries. ​ We may be obligated to repurchase loans that are originated for the Agencies’ programs if certain representations and warranties that we provide in connection with such originations are breached.
We engage either our Apprise appraisers or third-party vendors are engaged for appraisals and third-party vendors for engineering reports, environmental reports, flood certification reports, zoning reports, and credit reports. We utilize a list of approved third-party vendors for these reports. Each report is reviewed by our underwriting team for accuracy, quality, and comprehensiveness.
We utilize a list of approved third-party vendors for these reports. Each report is reviewed by our underwriting team for accuracy, quality, and comprehensiveness. All third-party vendors are reviewed periodically for the quality of their work and are removed from our list of approved vendors if the quality or timeliness of the reports is below our standards.
These hiring and technology efforts have resulted in a substantial increase in our market share of the overall multifamily appraisal market. ​ Servicing & Asset Management ​ Servicing & Asset Management focuses on servicing and asset-managing the portfolio of loans we originate and sell to the Agencies, brokering to certain life insurance companies, originating loans through our principal lending and investing activities, and managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate.
Additionally, these valuation specialists provide support for and insight to our Agency lending and property sales professionals. ​ Servicing & Asset Management (“SAM”) ​ SAM focuses on servicing and asset-managing the portfolio of loans we originate and sell to the Agencies, broker to certain life insurance companies, originate loans through our principal lending and investing activities, and manage through our tax credit equity funds focused on the affordable housing sector and other commercial real estate.
Unfunded commitments are highest during the fundraising and investment phases. WDIP receives management fees based on both unfunded commitments and funded investments. Additionally, with respect to the Funds, WDIP receives a percentage of the return above the fund return hurdle rate specified in the fund agreements.
AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments. Unfunded commitments are highest during the fundraising and investment phases. WDIP receives management fees based on both unfunded commitments and funded investments.
We review the borrower's financial statements for minimum net worth and liquidity requirements and obtain credit and criminal background checks. We also review the borrower's and key principal(s)’s operating track records, including evaluating the performance of other properties owned by the borrower and key principal(s). We also consider the borrower’s and key principal(s)’s bankruptcy and foreclosure history.
We also review the borrower's and key principal(s)’s operating track records, including evaluating the performance of other properties owned by the borrower and key principal(s). We also consider the borrower’s and key principal(s)’s bankruptcy and foreclosure history. We believe that lending to borrowers and key principals with proven track records as operators mitigates our credit risk.
Apprise also provides quarterly and annual valuation services to some of the largest institutional commercial real estate investors in the country. Prior to the GeoPhy acquisition, we and GeoPhy each owned a 50% interest in Apprise, and we accounted for the interest as an equity-method investment. Subsequent to the GeoPhy acquisition, Apprise is a wholly-owned subsidiary of Walker & Dunlop.
Prior to the acquisition of GeoPhy, a Netherlands-based company that also supports our small balance lending platform with data analytics, in 2022 we and GeoPhy each owned a 50% interest in Apprise, and we accounted for the interest as an equity-method investment. Subsequent to the GeoPhy acquisition, Apprise is a wholly-owned subsidiary of Walker & Dunlop.
In addition, we support the development and advancement of our employees and provide reimbursements for certain professional certifications and higher education. 13 Table of Contents ​ In recognition of the role our employees play as stewards of the “Walker Way,” we have historically granted broad-based restricted stock awards to our employees.
In recognition of the role our employees play as stewards of the “Walker Way,” we have historically granted broad-based restricted stock awards to our employees. Together with our employees, we continue our journey to be a great place to work for all.
All third-party vendors are reviewed periodically for the quality of their work and are removed from our list of approved vendors if the quality or timeliness of the reports is below our standards. This is particularly true for engineering and environmental reports on which we rely to make decisions regarding ongoing replacement reserves and environmental matters.
This is particularly true for engineering and environmental reports on which we rely to make decisions regarding ongoing replacement reserves and environmental matters.
We believe that lending to borrowers and key principals with proven track records as operators mitigates our credit risk. We review the fundamental value and credit profile of the underlying property, including an analysis of regional economic trends, appraisals of the property, site visits, and reviews of historical and prospective financials.
We review the fundamental value and credit profile of the underlying property, including an analysis of regional economic trends, appraisals of the property, site visits, and reviews of historical and prospective financials. We engage either our Apprise appraisers or third-party vendors for appraisals and third-party vendors for engineering reports, environmental reports, flood certification reports, zoning reports, and credit reports.
In 2023, we continued our focus on mental health through numerous employee-focused campaigns and additional training for our people managers. Our flexible working arrangements support employees working two days per week from home, with the ability to exercise more flexibility regarding in-office days and work schedules.
In 2024, we expanded our leave benefits for parental, maternity, and adoption leave. We also added a new third-party benefit to provide our employees with inclusive fertility, hormonal health, and family-forming benefits. Additionally, our flexible working arrangements support employees working two days per week from home, with the ability to exercise more flexibility regarding in-office days and work schedules.
The Interim Program JV assumes full risk of loss while the loans it originates are outstanding, while we assume risk commensurate with our 15% ownership interest. 8 Table of Contents Principal Lending and Investing— Using a combination of our own capital and warehouse debt financing, we offer interim loans that do not meet the criteria of the Interim Program JV (the “Interim Loan Program”).
We expect the joint venture to be terminated once all loans are fully repaid. We previously used a combination of our own capital and warehouse debt financing, to offer interim loans that do not meet the criteria of the Interim Program JV (the “Interim Loan Program”).
Similar techniques are used to manage our exposure to credit loss on loans originated under the Interim Program. Our underwriting process begins with a review of suitability for our investors and a detailed review of the borrower, key principal(s), and the property.
Our underwriting process begins with a review of suitability for our investors and a detailed review of the borrower, key principal(s), and the property. We review the borrower's financial statements for minimum net worth and liquidity requirements and obtain credit and criminal background checks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo fund these cash flow obligations, we typically use cash generated from our operations and, when necessary, from funds raised in the capital markets. A significant decline in our operational performance, an inability to access capital markets for funding, or a sharp rise in our cost of capital could adversely affect our ability to meet these future obligations.
Biggest changeA significant decline in our operational performance, an inability to access capital markets for funding, or a sharp rise in our cost of capital could adversely affect our ability to meet these future obligations. 18 Table of Contents We are dependent upon the success of the multifamily real estate sector, and conditions that negatively impact the multifamily sector may reduce demand for our products and services and materially and adversely affect us.
In the event of a breach of any representation or warranty concerning a loan, investors could, among other things, require us to repurchase the full amount of the loan and seek indemnification for losses from us, or, for Fannie Mae DUS loans, increase the level of risk-sharing on the loan.
In the event of a breach of any representation or warranty concerning a loan, investors could, among other things, require us to repurchase the full amount of the loan and/or seek indemnification for losses from us, or, for Fannie Mae DUS loans, increase the level of risk-sharing on the loan.
Walker, and the insurance proceeds from such insurance may be insufficient to cover the cost associated with recruiting a new Chief Executive Officer. We intend to drive a significant portion of our future growth through additional strategic acquisitions or investments in new ventures and new lines of business.
Walker, and the insurance proceeds from such insurance may be insufficient to cover the cost associated with recruiting a new Chief Executive Officer. We intend to drive a significant portion of our future growth through additional strategic acquisitions or investments in new markets, new ventures and new lines of business.
Under the full risk-sharing formula, we are required to absorb the first 5% of any losses on the unpaid principal balance of a loan at the time of loss settlement, and above 5% we are required to share the loss with Fannie Mae, with our maximum loss generally capped at 20% of the original unpaid principal balance of a loan.
Under the full risk-sharing formula, we are required to absorb the first 5% of any losses on the UPB of a loan at the time of loss settlement, and above 5% we are required to share the loss with Fannie Mae, with our maximum loss generally capped at 20% of the original unpaid principal balance of a loan.
As a result, our board of directors may establish a class or series of common or preferred stock with preferences, powers and rights, voting or otherwise, that are senior to, or otherwise conflict with, the rights of holders of our common stock or that could delay, defer, or prevent a transaction or a change in control of the Company that might involve a premium price for shares of our common stock or otherwise be in the best interests of our stockholders. 22 Table of Contents Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the event actions are taken that are not in our stockholders’ best interests.
As a result, our board of directors may establish a class or series of common or preferred stock with preferences, powers and rights, voting or otherwise, that are senior to, or otherwise conflict with, the rights of holders of our common stock or that could delay, defer, or prevent a transaction or a change in control of the Company that might involve a premium price for shares of our common stock or otherwise be in the best interests of our stockholders. 23 Table of Contents Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the event actions are taken that are not in our stockholders’ best interests.
As discussed in “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources,” we have made commitments to fund (i) equity-method investments, (ii) investments in affordable housing partnerships to be syndicated into LIHTC investment funds, and (iii) earnout payments from acquisitions, and we also must satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.
As discussed in “ Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ,” we have made commitments to fund (i) equity-method investments, (ii) investments in affordable housing partnerships to be syndicated into LIHTC investment funds, and (iii) earnout payments from acquisitions, and we also must satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.
If we do not successfully identify, complete and integrate such acquisitions or investments, our growth may be limited. Additionally, expansion of our business may place significant demands on our administrative, operational, and financial resources, and the acquired businesses or new ventures may not perform as we expect them to or become profitable.
If we do not successfully identify, complete and integrate such acquisitions or investments, our growth may be limited. Additionally, expansion of our business domestically or internationally may place significant demands on our administrative, operational, and financial resources, and the acquired businesses or new ventures may not perform as we expect them to or become profitable.
We are subject to risk of loss in connection with defaults on loans, including loans sold under the Fannie Mae DUS program, and could experience significant servicing advance obligations in connection with Fannie Mae and HUD loans we originate, that could materially and adversely affect our results of operations and liquidity.
We are subject to risk of loss in connection with defaults on loans, including loans sold under the Fannie Mae DUS program, and could experience significant servicing advance obligations in connection with Fannie Mae and HUD loans we originate, which could materially and adversely affect our results of operations and liquidity.
In addition to the annual impairment evaluation, we evaluate at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is 23 Table of Contents more likely than not an impairment loss has occurred.
In addition to the annual impairment evaluation, we evaluate at least quarterly, whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is 24 Table of Contents more likely than not an impairment loss has occurred.
Additionally, if a client has a commercial relationship with a bank that has failed or is otherwise distressed, the client or sponsor may experience issues receiving financial assistance to support their operations or consummate transactions, to the detriment of their business, financial condition and/or results of operations, which, in turn, may have a material adverse effect on our business, results of operations, liquidity, or financial condition. ​ We maintain cash deposits in excess of federally insured limits.
Additionally, 20 Table of Contents if a client has a commercial relationship with a bank that has failed or is otherwise distressed, the client or sponsor may experience issues receiving financial assistance to support their operations or consummate transactions, to the detriment of their business, financial condition and/or results of operations, which, in turn, may have a material adverse effect on our business, results of operations, liquidity, or financial condition. ​ We maintain cash deposits in excess of federally insured limits.
Our failure to comply with these requirements could lead to, among other 20 Table of Contents things, the loss of a license as an approved Agency lender, the inability to gain additional approvals or licenses, the termination of contractual rights without compensation, demands for indemnification or loan repurchases, class action lawsuits and administrative enforcement actions.
Our failure to comply with these requirements could lead to, among other things, the loss of a license as an approved Agency lender, the inability to gain additional approvals or licenses, the termination of contractual rights without compensation, demands for indemnification or loan repurchases, class action lawsuits and administrative enforcement actions.
For example, we are generally required to provide, among others, the following representations and warranties: we are authorized to do business and to sell or assign the loan; the loan conforms to the requirements of the Agencies and certain laws and regulations; the underlying mortgage represents a valid lien on the property and there are no other liens on the property; the loan documents are valid and enforceable; taxes, assessments, insurance premiums, rents and similar other payments have been paid or escrowed; the property is insured, conforms to zoning laws and remains intact; there is not any act or omission of which we, in the exercise of reasonable diligence should have been aware; and we do not know of any issues regarding the loan that are reasonably expected to cause the loan to be delinquent or unacceptable for investment or adversely affect its value.
For example, we are generally required to provide, among others, the following representations and warranties: we are authorized to do business and to sell or assign the loan; the loan conforms to the requirements of the Agencies (including with respect to property conditions and the financial performance of the property) and certain laws and regulations; the underlying mortgage represents a valid lien on the property and there are no other liens on the property; the loan documents are valid and enforceable; taxes, assessments, insurance premiums, rents and similar other payments have been paid or escrowed; the property is insured, conforms to zoning laws and remains intact; there is not any act or omission of which we, in the exercise of reasonable diligence should have been aware; and we do not know of any issues regarding the loan that are reasonably expected to cause the loan to be delinquent or unacceptable for investment or adversely affect its value.
Refer to our quarterly reports on Form 10-Q filed with the SEC in 2024 for material changes to the above discussion of risk factors. Item 1B. Unresolved Staff Comments. None.
Refer to our quarterly reports on Form 10-Q filed with the SEC in 2025 for material changes to the above discussion of risk factors. Item 1B. Unresolved Staff Comments. None.
Any or all of these factors could negatively impact the multifamily sector and, as a result, reduce the demand for our products and services. Any such reduction could materially and adversely affect us. 18 Table of Contents The loss of our Chairman and Chief Executive Officer could result in a material adverse effect on our business and results of operations.
Any or all of these factors could negatively impact the multifamily sector and, as a result, reduce the demand for our products and services. Any such reduction could materially and adversely affect us. ​ The loss of our Chairman and Chief Executive Officer could result in a material adverse effect on our business and results of operations.
Changes in fiscal, monetary, and budgetary policies and the operating status of the U.S. government are beyond our control, are difficult to predict, and could materially and adversely affect us. During periods of limited or no U.S. 14 Table of Contents government operations, our ability to originate HUD loans may be severely constrained.
Changes in fiscal, monetary, and budgetary policies and the operating status of the U.S. government are beyond our control, are difficult to predict, and could materially and adversely affect us. During periods of limited or no U.S. government operations, our ability to originate HUD loans may be severely constrained.
In addition, Fannie Mae can double or triple our risk-sharing obligations if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae. Fannie Mae also requires us to maintain collateral, which may include pledged securities, for our risk- 15 Table of Contents sharing obligations.
In addition, Fannie Mae can double or triple our risk-sharing obligations if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae. Fannie Mae also requires us to maintain collateral, which may include pledged securities, for our risk-sharing obligations.
We face risk that these loans to our joint venture partners may 17 Table of Contents not be repaid if the cash flow from operations is not sufficient to repay the loans, loans from third parties cannot be obtained, the equity in the property is not sold to a LIHTC fund, or the value of the equity in the underlying property is sufficient.
We face risk that these loans to our joint venture partners may not be repaid if the cash flow from operations is not sufficient to repay the loans, loans from third parties cannot be obtained, the equity in the property is not sold to a LIHTC fund, or the value of the equity in the underlying property is sufficient.
Additionally, as our 16 Table of Contents business continues to expand, we may need additional warehouse funding capacity for loans we originate. There can be no assurance that, in the future, we will be able to obtain additional warehouse funding capacity on favorable terms, on a timely basis, or at all.
Additionally, as our business continues to expand, we may need additional warehouse funding capacity for loans we originate. There can be no assurance that, in the future, we will be able to obtain additional warehouse funding capacity on favorable terms, on a timely basis, or at all.
A failed project could result in financial and liquidity exposure to us for the completion of the project or the disposition of the project at a loss. ​ 19 Table of Contents Noncompliance with various legal requirements by the affordable housing partnerships could impair our investors’ right to LIHTCs and have a negative impact on our business.
A failed project could result in financial and liquidity exposure to us for the completion of the project or the disposition of the project at a loss. ​ Noncompliance with various requirements by the affordable housing partnerships could impair our investors’ right to LIHTCs and have a negative impact on our business.
As of December 31, 2023, we had $3.9 billion of committed and uncommitted loan funding available through five commercial banks and $1.5 billion of uncommitted funding available through Fannie Mae’s As Soon As Pooled (“ASAP”) program. Additionally, consistent with industry practice, our existing loan warehouse facilities have terms of one year, and therefore require annual renewal.
As of December 31, 2024, we had $3.8 billion of committed and uncommitted loan funding available through five commercial banks and $1.5 billion of uncommitted funding available through Fannie Mae’s As Soon As Pooled program. Additionally, consistent with industry practice, our existing loan warehouse facilities have terms of one year, and therefore require annual renewal.
While we have designed our controls and processes to operate in a remote working environment, there is a heightened risk such 21 Table of Contents controls and processes may not detect or prevent unauthorized access to our information systems.
While we have designed our controls and processes to operate in a remote working environment, there is a heightened risk such controls and processes may not detect or prevent unauthorized access to our information systems.
Negative impacts of acquisitions of new ventures that could have a material and adverse effect on us include diversion of management's attention from the regular operations of our business and potential loss of our key personnel, inability to hire and retain qualified bankers and brokers, and inability to achieve the anticipated benefits of the acquisitions or new investments.
Negative impacts of acquisitions or investments in new markets, new ventures, and new lines of business that could have a material and adverse effect on us include diversion of management's attention from the regular operations of our business and potential loss of our key personnel, inability to hire and retain qualified bankers and brokers, and inability to achieve the anticipated benefits 19 Table of Contents of the acquisitions or new investments.
Below we discuss the risks associated with these investments. (i) Joint ventures and other equity method investments We make investments in various joint ventures, including investments in various venture capital funds with a specific focus on identifying and investing in property technology and financial technology companies with a predominant focus on the housing and commercial real estate sectors.
(i) Joint ventures and other equity method investments We make investments in various joint ventures, including investments in various venture capital funds with a specific focus on identifying and investing in property technology and financial technology companies with a predominant focus on the housing and commercial real estate sectors.
We are also subject to changes in laws, regulations and existing Agency program requirements, including potential increases in reserve and risk retention requirements that could increase our costs and affect the way we conduct our business, which could materially and adversely affect us.
We are also subject to changes in laws, regulations and existing Agency program requirements, including with regard to underwriting and asset management requirements and potential increases in reserve and risk retention requirements that could increase our costs and affect the way we conduct our business, which could materially and adversely affect us.
Pursuant to generally accepted accounting principles in the United States of America (“GAAP”), we are required to use certain assumptions and estimates in preparing our financial statements, including in determining credit loss reserves and the fair value of MSRs, among other items.
Pursuant to generally accepted accounting principles in the United States of America (“GAAP”), we are required to use certain assumptions and estimates in preparing our financial statements, including in determining credit loss and indemnification reserves and the fair value of Mortgage Servicing Rights (“MSRs”), among other items.
The conservatorship is a statutory process designed to preserve and conserve the GSEs’ assets and property and put them in a sound and solvent condition.
The conservatorship is a statutory process designed to preserve and conserve the GSEs’ assets and property and put them in a sound and solvent 14 Table of Contents condition.
As of December 31, 2023, our allowance for risk-sharing as a percentage of the at-risk balance was 0.05%, or $31.6 million, and reflects our current estimate of our future expected payouts under our risk-sharing obligations. Over the past 10 years, we have settled $15.3 million of risk-sharing losses, or 0.6 basis points of the average at-risk balance.
As of December 31, 2024, our allowance for risk-sharing as a percentage of the at-risk balance was 0.04%, or $28.2 million, and reflects our current estimate of our future expected payouts under our risk-sharing obligations. Over the past 10 years, we have settled $10.0 million of risk-sharing losses, or 0.3 basis points of the average at-risk balance.
As of December 31, 2023, three at-risk loans were in default with an aggregate unpaid principal balance of $27.2 million and an aggregate collateral-based reserve of $2.8 million that had defaulted and are awaiting ultimate disposition.
As of December 31, 2024, three at-risk Fannie Mae loans were in default with an aggregate unpaid principal balance of $30.7 million and an aggregate collateral-based reserve of $2.8 million that had defaulted and are awaiting ultimate disposition.
Moreover, other factors may adversely affect the multifamily sector, including general business, economic and market conditions, including rising interest rates or a period of elevated interest rates, inflation, political and geographical instability, fluctuations in the real estate and debt capital markets, changes in government fiscal and monetary policies, regulations and other laws, rules and regulations governing real estate, zoning or taxes, changes in interest rate levels, the potential liability under environmental and other laws, and other unforeseen events.
Moreover, other factors may adversely affect the multifamily sector, including general business, economic and market conditions, including higher interest rates or a period of elevated interest rates, inflation, political and geographical instability, trade tensions, including the recent tariffs proposed by the United States and retaliatory tariffs by other countries, fluctuations in the real estate and debt capital markets, changes in government fiscal and monetary policies, regulations and other laws, rules and regulations governing real estate, zoning or taxes, changes in interest rate levels, the potential liability under environmental and other laws, and other unforeseen events.
As of December 31, 2023, we had pledged securities of $184.1 million as collateral against future losses related to $58.8 billion of loans outstanding that are subject to risk-sharing obligations, as more fully described under “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources,” which we refer to as our “at-risk balance.” Fannie Mae collateral requirements may change in the future.
As of December 31, 2024, we had pledged securities of $206.9 million as collateral against future losses related to $63.4 billion of loans outstanding that are subject to risk-sharing obligations, as more fully described under “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Quality and Allowance for Risk-Sharing Obligation,” which we refer to as our “at-risk balance.” Fannie Mae collateral requirements may change in the future.
We use corporate capital to make investments in (i) joint ventures and other equity method investments, (ii) loans to our LIHTC joint venture development partners, (iii) investments in LIHTC equity funds, (iv) co-investments in funds managed by our registered investment advisor, and (v) loans made by the Interim Loan JV or through the Interim Loan Program.
We use corporate capital to make investments in (i) joint ventures and other equity method investments, (ii) loans to our LIHTC joint venture development partners, (iii) investments in LIHTC equity funds, and (iv) co-investments in funds managed by our registered investment adviser.
Our ability to fund these uses of capital is dependent on both our results of operations and our ability to access capital markets. A decline in the results of our operations, an inability to access capital markets, or an increase in the cost of capital may materially affect our operations.
A decline in the results of our operations, an inability to access capital markets, or an increase in the cost of capital may materially affect our operations.
In November 2023, the FHFA updated the GSEs’ loan origination caps to $70.0 billion for the four-quarter period beginning January 1, 2024 and ending December 31, 2024. The new caps apply to all multifamily business with limited exclusions. The FHFA also maintained the 50.0% target for the GSEs’ multifamily business to be mission-driven, affordable housing.
In November 2024, the FHFA updated the GSEs’ loan origination caps to $73.0 billion for the four-quarter period beginning January 1, 2025 and ending December 31, 2025, compared to $70.0 billion each for the same period in 2024. The new caps apply to all multifamily business with limited exclusions.
Additionally, most of our employees work remotely or in a hybrid arrangement and will continue to do so for the foreseeable future. Remote and hybrid working arrangements at our Company (and at many third-party providers) increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Remote and hybrid working arrangements at our Company (and at many third-party providers) increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Under the Fannie Mae DUS program, we originate and service multifamily loans for Fannie Mae without having to obtain Fannie Mae's prior approval for certain loans, as long as the loans meet the underwriting guidelines set forth by Fannie Mae.
Because of the foregoing, a rise in delinquencies could have a material adverse effect on us. Under the Fannie Mae DUS program, we originate and service multifamily loans for Fannie Mae without having to obtain Fannie Mae's prior approval for certain loans, as long as the loans meet the underwriting guidelines set forth by Fannie Mae.
We may be required to repurchase loans or indemnify loan purchasers if there is a breach of a representation or warranty made by us in connection with the sale of loans through the programs of the Agencies, which could have a material adverse effect on us.
There can be no assurance that we will maintain compliance with all financial and other covenants included in our loan warehouse facilities in the future. 16 Table of Contents We may be required to repurchase loans or indemnify loan purchasers if there is a breach of a representation or warranty made by us in connection with the sale of loans through the programs of the Agencies, which could have a material adverse effect on us.
We cannot predict whether FHFA will implement further regulatory and other policy changes that will modify the GSEs’ multifamily businesses. Congress has considered various housing finance reform bills since the GSEs went into conservatorship in 2008. Several of the bills have called for the winding down or receivership of the GSEs.
The FHFA also maintained the 50.0% target for the GSEs’ multifamily business to be mission-driven, affordable housing. We cannot predict whether FHFA will implement further regulatory and other policy changes that will modify the GSEs’ multifamily businesses. Congress has considered various housing finance reform bills since the GSEs went into conservatorship in 2008.
Business “Our Business—Affordable Housing Real Estate Services,” our affordable housing real estate service derives revenue from the syndication of partnership interests in properties eligible for low-income housing tax credits, or LIHTCs.
Business “Our Business—Affordable Housing Real Estate Services,” our affordable housing real estate service derives revenue from the syndication of partnership interests in properties eligible for low-income housing tax credits, or LIHTCs. Congress could repeal or modify the LIHTC provisions at any time or modify the tax laws so that the value of LIHTC benefits is reduced.
Accordingly, the success of our business is closely tied to the overall success of the multifamily real estate market. Various changes in real estate conditions may impact the multifamily sector. Any negative trends in such real estate conditions may reduce demand for our products and services and, as a result, adversely affect our results of operations.
Any negative trends in such real estate conditions may reduce demand for our products and services and, as a result, adversely affect our results of operations.
These restrictions (and restrictions included in our long-term debt agreement) may interfere with our ability to obtain financing or to engage in other business activities, which could materially and adversely affect us. There can be no assurance that we will maintain compliance with all financial and other covenants included in our loan warehouse facilities in the future.
These restrictions (and restrictions included in our long-term debt agreement) may interfere with our ability to obtain financing or to engage in other business activities, which could materially and adversely affect us.
A significant amount of repurchase or indemnification obligations imposed on us could have a material adverse effect on us and increase our liquidity needs. We have made various investments that are funded with corporate capital. These investments may involve a greater risk of loss than our traditional real estate lending activities.
We have made various investments that are funded with corporate capital. These investments may involve a greater risk of loss than our traditional real estate lending activities.
We expect Congress to continue considering housing finance reform in the future, including conducting hearings and considering legislation that could alter the housing finance system. We cannot predict the prospects for the enactment, timing or content of legislative proposals regarding the future status of the GSEs.
Several of the bills have called for the winding down or receivership of the GSEs. We expect Congress to continue considering housing finance reform in the future, including conducting hearings and considering legislation that could alter the housing finance system.
Our asset management process may be unsuccessful in identifying loans that are in danger of underperforming or defaulting or in taking appropriate action once those loans are identified. While we can recommend a loss mitigation strategy for the Agencies, decisions regarding loss mitigation are within the control of the Agencies.
Our asset management process may be unsuccessful in identifying loans that are in danger of underperforming or defaulting or in taking appropriate action once those loans are identified. Decisions regarding loss mitigation are within the control of the Agencies. Previous turmoil in the real estate, credit and capital markets have made this process even more difficult and unpredictable.
There can be no assurance that our deposits in excess of FDIC insurance limits will be backstopped by the U.S. government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, or government institutions, or by acquisition in the event of a failure or liquidity crisis. ​ Risks Relating to Regulatory Matters If we fail to comply with the numerous government regulations and program requirements of the Agencies, we may lose our approved lender status with these entities and fail to gain additional approvals or licenses for our business.
There can be no assurance that our deposits in excess of FDIC insurance limits will be backstopped by the U.S. government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, or government institutions, or by acquisition in the event of a failure or liquidity crisis. ​ We are subject to various risks associated with climate change and other ESG matters. ​ There is increased scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other ESG matters.
Our ability to recover on a claim against any party would also be dependent, in part, upon the financial condition and liquidity of such party. There can be no assurance that we, our employees or third parties will not make mistakes that would subject us to repurchase or indemnification obligations.
There can be no assurance that we, our employees or third parties will not make mistakes that would subject us to repurchase or indemnification obligations.
A reduction in the prices paid for our loans and services or an increase in loan or security interest rates required by investors could materially and adversely affect our results of operations.
In limited circumstances we have agreed, and may in the future agree, with Fannie Mae to increase our loss sharing to 100% of a loan’s UPB in lieu of the risk-sharing agreement described above. 15 Table of Contents A reduction in the prices paid for our loans and services or an increase in loan or security interest rates required by investors could materially and adversely affect our results of operations.
We are dependent upon the success of the multifamily real estate sector and conditions that negatively impact the multifamily sector may reduce demand for our products and services and materially and adversely affect us. We provide commercial real estate financial products and services primarily to developers and owners of multifamily properties.
We provide commercial real estate financial products and services primarily to developers and owners of multifamily properties. Accordingly, the success of our business is closely tied to the overall success of the multifamily real estate market. Various changes in real estate conditions may impact the multifamily sector.
Previous turmoil in the real estate, credit and capital markets have made this process even more difficult and unpredictable. When loans become delinquent, we may incur additional expenses in servicing and asset managing the loan and are typically required to advance principal and interest payments and tax and insurance escrow amounts.
When loans become delinquent, we may incur additional expenses in servicing and asset managing the loan and are typically required to advance principal and interest payments and tax and insurance escrow amounts. All of these items discussed above could have a negative impact on our cash flows.
We intend to pursue continued growth by acquiring or starting complementary businesses, but we cannot guarantee such efforts will be successful or profitable. We do not know whether the favorable conditions that have enabled our past growth through acquisitions and strategic investments will continue.
In some circumstances, we may determine to do so through the acquisition of complementary businesses or investments in new ventures rather than through internal growth. We do not know whether the favorable conditions that have enabled our past growth through acquisitions and strategic investments will continue.
Our future success depends, in part, on our ability to expand or modify our business in response to changing client demands and competitive pressures. In some circumstances, we may determine to do so through the acquisition of complementary businesses or investments in new ventures rather than through internal growth .
We intend to pursue continued growth by acquiring or starting complementary businesses, but we cannot guarantee such efforts will be successful or profitable. Our future success depends, in part, on our ability to expand or modify our business in response to changing client demands and competitive pressures.
Removed
All of these items discussed above could have a negative impact on our cash flows. Because of the foregoing, a rise in delinquencies could have a material adverse effect on us.
Added
We cannot predict the prospects for the enactment, timing or content of legislative proposals regarding the future status of the GSEs.
Removed
(iv) Interim Loan JV and Interim Loan Program Under the Interim Loan JV and Interim Loan Program, we offer short-term, floating-rate loans to borrowers seeking to acquire or reposition multifamily properties that do not currently qualify for permanent financing. Such a borrower often has identified a transitional asset that has been under-managed and/or is located in a recovering market.
Added
Many of the representations and warranties we are required to make are based on information provided to us by borrowers or third parties and there is a risk that these representations and warranties may be breached, either inadvertently or due to unforeseen circumstances, including inaccurate, incomplete or fraudulent information provided by borrowers or third parties, errors in documentation, changes in program guidelines, or changes in the regulatory environment.
Removed
We bear the risk that we may not recover some or all of the loan balance if (i) the borrower does not receive sufficient return on the asset to satisfy the interim loan or (ii) the borrower is unable to obtain permanent financing.
Added
Given the inherent risks associated with loan origination and servicing activities, particularly in highly-regulated programs such as Fannie Mae DUS and Freddie Mac Optigo, we maintain underwriting and due diligence processes, compliance procedures, and risk mitigation measures to minimize the likelihood of breaches, though such measures may not always be fully effective in mitigating all risks, especially in the case of breaches tied to the actions of borrowers or third parties, from whom recovery may be limited.
Removed
Additionally, interim loans may be relatively less liquid due to the nature of the underlying property, which may make them unsuitable for securitization and may be difficult to fully recover the loan amount from sale proceeds.
Added
In 2024, we received loan repurchase requests from Fannie Mae and Freddie Mac for five loans with an aggregate unpaid principal balance of $87.3 million, which we repurchased or indemnified. The provision for credit losses associated with these loans was $14.2 million for the year ended December 31, 2024.
Removed
Carrying loans for longer periods of time on our balance sheet exposes us to greater risks of loss than we currently face for loans that are pre-sold or placed with investors, including, without limitation, 100% exposure for defaults and impairment charges, which may adversely affect our profitability. We have contractual obligations that will require significant uses of capital.
Added
Additionally, we incurred $10.6 million of other operating expenses for the year ended December 31, 2024 in connection with the five repurchase requests and resulting activities. Our ability to recover on a claim against any party would also be dependent, in part, upon the financial condition and liquidity of such party.
Removed
Although the LIHTC programs are a permanent part of the U.S. federal tax code and have historically enjoyed broad political support, Congress could repeal or modify the LIHTC provisions at any time or modify the tax laws so that the value of LIHTC benefits is reduced.
Added
A significant amount of repurchase or indemnification obligations imposed on us could have a material adverse effect on us and increase our liquidity needs. 17 Table of Contents We own and operate multifamily properties as a result of foreclosures or other acquisitions that involve risks that could adversely affect our business and financial results.
Removed
We also are subject to inspection by the Agencies and regulatory authorities.
Added
We have taken possession of and own a limited number of multifamily properties that we obtained through foreclosures or other acquisitions and may foreclose on additional properties in the future in the ordinary course of our business.
Added
The ownership and operation of these properties involves risks, including the risk that the property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements will exceed estimates.
Added
When we take possession of a property, we may face risks associated with entering a new market such as a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures as well as environmental risks associated with owning such properties.
Added
The properties may be subject to liabilities, including tax liabilities, which may be without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based on our ownership of any of these properties, then we may have to pay substantial sums to settle it.
Added
We have contractual obligations that will require significant uses of capital. Our ability to fund these uses of capital is dependent on both our results of operations and our ability to access capital markets.
Added
To fund these cash flow obligations along with any obligations we may have related to loan repurchases, we typically use cash generated from our operations and, when necessary, from funds raised in the capital markets.
Added
In addition, we must manage the potential conflicts between locally accepted business practices in any given jurisdiction and our obligations to comply with laws and regulations, including anti-corruption laws or regulations applicable to us, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.
Added
We must also manage our obligations to comply with laws and regulations related to trade restrictions, and sanctions, including regulations established by the U.S. Office of Foreign Assets Control.
Added
Government agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of anti-corruption laws or regulations, trade restrictions, sanctions, and other laws, rules, and regulations.
Added
If we are unable to successfully identify, complete and integrate acquisitions or investments or manage the complexity of our global operations successfully, our financial results could be adversely affected.
Added
We also may be required to or elect to cease or modify our operations or the offering of our products and services in certain regions, including as a result of the risks described above, which could adversely affect our business and financial results.
Added
For example, there are inherent environmental risks wherever business is conducted. Various events, such as floods, fires, or storms, could interrupt our operations or damage properties we have interests in.
Added
Climate change and other environmental pressures may increase the frequency or intensity of such events, as well as contribute to chronic changes (such as sea level rise or changes in meteorological or hydrological patterns) that may result in similar risks.
Added
Various actions by society to mitigate or adapt to such phenomena may also result in additional risks, including changes to the desirability of markets where we operate. For example, various regulators (such as California and the European Union) have adopted or are considering adopting requirements for companies to undertake disclosures or actions on climate- and other ESG-related matters.
Added
These regulations are not uniform, and may not be interpreted or applied uniformly, which may increase the cost and complexity of compliance, along with any associated risks. ​ While we engage in various initiatives to manage ESG matters and address related stakeholder expectations, such initiatives can be costly and may not have the desired effect.
Added
For example, many of our initiatives leverage methodologies, standards, and data that are complex and continue to evolve. As with other companies, our approach to such matters also evolves, and we cannot guarantee that our approach will align with the expectations or preferences of any particular stakeholder. Moreover, stakeholder expectations vary and at times conflict.
Added
Proponents and opponents of such matters are increasingly resorting to activism, including litigation, to advance their perspectives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee Risk Factors – “If we fail to comply with laws, regulations and market standards regarding the privacy, use, and security of customer information, or if we are the target of a successful cyberattack, we may be subject to legal and regulatory actions and our reputation would be harmed.” Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit and Risk Committee oversight of cybersecurity risks and the steps that management has taken to monitor and control exposure to such risks.
Biggest changeSee Risk Factors – “If we fail to comply with laws, regulations and market standards regarding the privacy, use, and security of customer information, or if we are the target of a successful cyberattack, we may be subject to legal and regulatory actions and our reputation would be harmed.” Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit and Risk Committee oversight of cybersecurity risks and the steps that management has taken to monitor and control exposure to such risks. 25 Table of Contents The Audit and Risk Committee receives quarterly reports from our Chief Information Security Officer (“CISO”) and our Chief Information Officer on our cybersecurity risks and meets in executive session with our CISO following such reports.
Our information security management team is informed about and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public, or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in our information technology environment.
Our information security management team is informed about and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public, or private sources, including managed service providers engaged by us, and alerts and reports produced by security tools deployed in our information technology environment.
The CISO manages a team of employees, which has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. The CISO brings over 30 years of technology, cybersecurity, and risk management experience from the finance and healthcare industries.
The CISO manages a team of employees, which has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained managed service providers. The CISO brings over 30 years of technology, cybersecurity, and risk management experience from the finance and healthcare industries.
In 2023, we established an information technology risk committee comprised of senior managers in our information technology, loan origination, loan servicing, accounting, and legal groups that meet monthly to review information security risks and the development and implementation of policies and procedures and other controls to mitigate cybersecurity and other information security risks.
Our information technology risk committee is comprised of senior managers in our information technology, loan origination, loan servicing, accounting, and legal groups that meet monthly to review information security risks and the development and implementation of policies and procedures and other controls to mitigate cybersecurity and other information security risks.
Key elements of our cybersecurity risk management program include, but are no limited to the following: ● risk metrics and self-assessments designed to help identify cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; ● a security team principally responsible for managing: (1) our cybersecurity risk assessment processes, (2) our cybersecurity controls and processes, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our cybersecurity controls and processes; ● periodic required cybersecurity awareness training of our employees; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● a third-party risk management process for key service providers, suppliers, and vendors.
Key elements of our cybersecurity risk management program include, but are not limited to, the following: ● risk metrics and self-assessments designed to help identify cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; ● a security team principally responsible for managing: (1) our cybersecurity risk assessment processes, (2) our cybersecurity controls and processes, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our cybersecurity controls and processes; ● periodic required cybersecurity awareness training of our employees; ● a Cybersecurity & Technology Risk Committee, comprised of technology and business leaders, that provides risk advisory and general guidance regarding new and modified information security controls; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● a third-party risk management process for key service providers, suppliers, and vendors .
Our management team, including our CISO, is responsible for assessing and managing our material risks from cybersecurity threats.
Our Chief Risk Officer has primary responsibility for our enterprise risk management program and works with our CISO in the oversight of our cybersecurity risk management program. Our management team, including our CISO, is responsible for assessing and managing our material risks from cybersecurity threats .
In addition, management updates the Audit and Risk Committee, as necessary, regarding significant cybersecurity incidents. 24 Table of Contents The Audit and Risk Committee reports to the full Board regarding its activities, including those related to cybersecurity. In 2023, the full Board also received a presentation from a third-party expert on cybersecurity risks.
In addition, management updates the Audit and Risk Committee, as necessary, regarding significant cybersecurity incidents. The Audit and Risk Committee reports to the full Board regarding its activities, including those related to cybersecurity. In 2024, we created a new position for a full time Chief Risk Officer.
Removed
The Audit and Risk Committee receives quarterly reports from our Chief Information Security Officer (“CISO”) and our Chief Information Officer on our cybersecurity risks and meets in executive session with our CISO following such reports.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn February 2024, our Board of Directors authorized the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning on February 23, 2024. ​ 26 Table of Contents The following table provides information regarding common stock repurchases for the quarter and year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ Dollar Value ​ ​ ​ Total Number ​ Average ​ Part of Publicly ​ of Shares that May ​ ​ of Shares Price Paid Announced Plans Yet Be Purchased Under ​ Period ​ Purchased ​ per Share ​ or Programs ​ the Plans or Programs ​ 1st Quarter ​ 184,824 ​ $ 92.60 ​ — ​ ​ ​ ​ 2nd Quarter ​ 9,142 ​ $ 72.37 ​ — ​ ​ ​ ​ 3rd Quarter ​ 10,000 ​ $ 87.09 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1-31, 2023 ​ 2,252 ​ $ 74.24 ​ — ​ $ 75,000,000 ​ November 1-30, 2023 ​ 52 ​ ​ 65.35 ​ — ​ ​ 75,000,000 ​ December 1-31, 2023 ​ 14,711 ​ ​ 96.00 ​ — ​ ​ 75,000,000 ​ 4th Quarter 17,015 ​ $ 93.03 ​ — ​ $ 75,000,000 ​ Total 220,981 ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities Authorized for Issuance Under Equity Compensation Plans For information regarding securities authorized for issuance under our employee share-based compensation plans, see Part III, Item 12.
Biggest changeIn February 2025, our Board of Directors again authorized the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning on February 21, 2025. ​ The following table provides information regarding common stock repurchases for the quarter and year ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased as ​ Dollar Value ​ ​ ​ Total Number ​ Average ​ Part of Publicly ​ of Shares that May ​ ​ of Shares Price Paid Announced Plans Yet Be Purchased Under ​ Period ​ Purchased ​ per Share ​ or Programs ​ the Plans or Programs ​ 1 st Quarter ​ 101,394 ​ $ 96.23 ​ — ​ ​ ​ ​ 2 nd Quarter ​ 8,490 ​ $ 95.31 ​ — ​ ​ ​ ​ 3 rd Quarter ​ 13,485 ​ $ 104.96 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1-31, 2024 ​ 997 ​ $ 110.82 ​ — ​ $ 75,000,000 ​ November 1-30, 2024 ​ 2,378 ​ ​ 108.97 ​ — ​ ​ 75,000,000 ​ December 1-31, 2024 ​ — ​ ​ — ​ — ​ ​ 75,000,000 ​ 4 th Quarter 3,375 ​ $ 109.52 ​ — ​ $ 75,000,000 ​ Total 126,744 ​ ​ ​ ​ — ​ ​ ​ ​ ​ Securities Authorized for Issuance Under Equity Compensation Plans For information regarding securities authorized for issuance under our employee share-based compensation plans, see Part III, Item 12.
Stock Performance Graph The following chart graphs our performance in the form of a cumulative five-year total return to holders of our common stock since December 31, 2018 in comparison to the Standard and Poor’s (“S&P”) 500 and the S&P 600 Small Cap Financials Index for that same five-year period.
Stock Performance Graph The following chart graphs our performance in the form of a cumulative five-year total return to holders of our common stock since December 31, 2019 in comparison to the Standard and Poor’s (“S&P”) 500 and the S&P 600 Small Cap Financials Index for that same five-year period.
While the dividend level remains a decision of our Board of Directors, it is subject to these direct 25 Table of Contents and indirect restrictions, and will continue to be evaluated in the context of future business performance. We currently believe that we can support future comparable quarterly dividend payments, barring significant unforeseen events.
While the dividend level remains a decision of our Board of Directors, it is subject to these direct and indirect restrictions, and it will continue to be evaluated in the context of future business performance. We currently believe that we can support future comparable quarterly dividend payments, barring significant unforeseen events.
The comparison below assumes $100 was invested on December 31, 2018 in our common stock and in each of the indices shown and assumes that all dividends were reinvested.
The comparison below assumes $100 was invested on December 31, 2019 in our common stock and in each of the indices shown and assumes that all dividends were reinvested.
As of the close of business on January 31, 2024, there were 23 stockholders of record. We believe that the number of beneficial holders is much greater. Dividend Policy During 2023, our Board of Directors declared, and we paid, four quarterly dividends totaling $2.52 per share.
As of the close of business on January 31, 2025, there were 44 stockholders of record. We believe that the number of beneficial holders is much greater. Dividend Policy During 2024, our Board of Directors declared, and we paid, four quarterly dividends totaling $2.60 per share.
Our stock price performance shown in the following graph is not indicative of future performance or relative performance in comparison to the indices. ​ Issuer Purchases of Equity Securities ​ Under the 2020 Equity Incentive Plan, subject to the Company’s approval, grantees have the option of electing to satisfy minimum tax withholding obligations at the time of vesting or exercise by allowing the Company to withhold and purchase the shares of stock otherwise issuable to the grantee.
Our stock price performance shown in the following graph is not indicative of future performance or relative performance in comparison to the indices. ​ Issuer Purchases of Equity Securities ​ Under the 2024 Equity Incentive Plan, which was approved by stockholders on May 2, 2024 and constitutes an amendment and restatement of the Company’s 2020 Equity Incentive Plan, subject to the Company’s approval, grantees have the option of electing to satisfy minimum tax withholding obligations at the time of vesting or exercise by allowing the Company to withhold and purchase the shares of stock otherwise issuable to the grantee.
For the quarter and year ended December 31, 2023, we purchased 17 thousand shares and 221 thousand shares, respectively, to satisfy grantee tax withholding obligations on share-vesting events . We announced a share repurchase program in the first quarter of 2023.
For the three months and year ended December 31, 2024, we purchased three thousand shares and 127 thousand shares, respectively, to satisfy grantee tax withholding obligations on share-vesting events . We announced a share repurchase program in the first quarter of 2024.
In February 2024, our Board of Directors declared a dividend for the first quarter of 2024 of $0.65 per share, a 3% increase over the dividend declared for the fourth quarter of 2023. We expect to make regular quarterly dividend payments for the foreseeable future.
In February 2025, our Board of Directors declared a dividend for the first quarter of 2025 of $0.67 per share, a 3% increase over the dividend declared for the fourth quarter of 2024.
Our current and projected dividends provide a return to stockholders while retaining sufficient capital to continue investing in the growth of our business.
We expect to make regular quarterly dividend payments for the foreseeable future. 26 Table of Contents Our current and projected dividends provide a return to stockholders while retaining sufficient capital to continue investing in the growth of our business.
The repurchase program authorized by our Board of Directors permits us to repurchase up to $75.0 million of shares of our common stock over a 12-month period ending February 22, 2024. We did not purchase any shares under this share repurchase program during 2023. The Company had $75 million of authorized share repurchase capacity remaining as of December 31, 2023.
The repurchase program authorized by our Board of Directors permitted us to repurchase up to $75.0 million of 27 Table of Contents shares of our common stock over a 12-month period ended February 23, 2025. We did not purchase any shares under this share repurchase program.
Added
The Company had $75 million of authorized share repurchase capacity remaining as of December 31, 2024.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. ​ [Reserved] ​ 27 Item 7. ​ Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. ​ Financial Statements and Supplementary Data 58
Biggest changeItem 6. ​ [Reserved] ​ 28 Item 7. ​ Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 59 Item 8. ​ Financial Statements and Supplementary Data 59

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSIGNIFICANT COMPONENTS OF CASH FLOWS – 2023 COMPARED TO 2022 CONSOLIDATED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ Dollar ​ Percentage (dollars in thousands) 2023 2022 Change Change Net cash provided by (used in) operating activities ​ $ (518) ​ $ 1,582,704 ​ $ (1,583,222) ​ (100) % Net cash provided by (used in) investing activities ​ 126,869 ​ (133,777) ​ 260,646 ​ (195) ​ Net cash provided by (used in) financing activities ​ 6,769 ​ (1,583,824) ​ 1,590,593 ​ (100) ​ Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period ("Total cash") ​ ​ 391,403 ​ ​ 258,283 ​ ​ 133,120 ​ 52 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net receipt (use) of cash for loan origination activity ​ $ (179,624) ​ $ 1,372,681 ​ $ (1,552,305) ​ (113) % Net cash provided by (used in) operating activities, excluding loan origination activity ​ ​ 179,106 ​ ​ 210,023 ​ ​ (30,917) ​ (15) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchases of pledged AFS securities ​ $ (12,548) ​ $ (60,802) ​ $ 48,254 ​ (79) % Proceeds from the prepayment/sale of pledged AFS securities ​ ​ 10,679 ​ ​ 14,040 ​ ​ (3,361) ​ (24) ​ Acquisitions, net of cash received ​ ​ — ​ ​ (114,163) ​ ​ 114,163 ​ (100) ​ Capital expenditures ​ ​ (16,201) ​ ​ (21,995) ​ ​ 5,794 ​ (26) ​ Net payoff of loans held for investment ​ ​ 160,662 ​ ​ 67,709 ​ ​ 92,953 ​ 137 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Borrowings (repayments) of warehouse notes payable, net ​ $ 189,736 ​ $ (1,370,705) ​ $ 1,560,441 ​ (114) % Borrowings of interim warehouse notes payable ​ — ​ 36,459 ​ (36,459) ​ (100) ​ Repayments of interim warehouse notes payable ​ (119,835) ​ ​ (63,858) ​ (55,977) ​ 88 ​ Repayments of notes payable ​ ​ (122,046) ​ ​ (36,629) ​ ​ (85,417) ​ 233 ​ Borrowings of notes payable ​ ​ 196,000 ​ ​ — ​ ​ 196,000 ​ N/A ​ Payment of contingent consideration ​ ​ (26,090) ​ ​ (21,191) ​ ​ (4,899) ​ 23 ​ Repurchase of common stock ​ ​ (20,511) ​ ​ (42,369) ​ ​ 21,858 ​ (52) ​ Cash dividends paid ​ ​ (84,836) ​ ​ (80,145) ​ ​ (4,691) ​ 6 ​ The decrease in net cash used in operating activities was driven primarily by loans originated and sold.
Biggest changeSIGNIFICANT COMPONENTS OF CASH FLOWS – 2024 COMPARED TO 2023 CONSOLIDATED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ Dollar ​ Percentage (in thousands) 2024 2023 Change Change Net cash provided by (used in) operating activities ​ $ 129,359 ​ $ (518) ​ $ 129,877 ​ (25,073) % Net cash provided by (used in) investing activities ​ (38,135) ​ 126,869 ​ (165,004) ​ (130) ​ Net cash provided by (used in) financing activities ​ (154,729) ​ 6,769 ​ (161,498) ​ (2,386) ​ Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period ("Total cash") ​ ​ 327,898 ​ ​ 391,403 ​ ​ (63,505) ​ (16) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net receipt (use) of cash for loan origination activity ​ $ (23,629) ​ $ (179,624) ​ $ 155,995 ​ (87) % Net cash provided by (used in) operating activities, excluding loan origination activity ​ ​ 152,988 ​ ​ 179,106 ​ ​ (26,118) ​ (15) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchases of pledged AFS securities ​ $ (51,400) ​ $ (12,548) ​ $ (38,852) ​ 310 % Purchases of equity-method investments ​ ​ (19,406) ​ ​ (24,679) ​ ​ 5,273 ​ (21) ​ Principal collected on loans held for investment ​ 55,701 ​ 160,662 ​ (104,961) ​ (65) ​ Originations and repurchase of loans held for investment ​ ​ (37,928) ​ ​ — ​ ​ (37,928) ​ N/A ​ Other investing activities, net ​ ​ 18,316 ​ ​ 8,956 ​ ​ 9,360 ​ 105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from (used in) financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Borrowings (repayments) of warehouse notes payable, net ​ $ 33,705 ​ $ 189,736 ​ $ (156,031) ​ (82) % Repayments of interim warehouse notes payable ​ (25,585) ​ ​ (119,835) ​ 94,250 ​ (79) ​ Repayments of notes payable ​ ​ (8,019) ​ ​ (122,046) ​ ​ 114,027 ​ (93) ​ Borrowings of note payable ​ ​ — ​ ​ 196,000 ​ ​ (196,000) ​ (100) ​ Payment of contingent consideration ​ ​ (34,317) ​ ​ (26,090) ​ ​ (8,227) ​ 32 ​ Repurchase of common stock ​ ​ (12,381) ​ ​ (20,511) ​ ​ 8,130 ​ (40) ​ Purchase of noncontrolling interests ​ ​ (17,709) ​ ​ — ​ ​ (17,709) ​ N/A ​ ​ Operating Activities Cash provided by (used in) operating activities changed due to: (i) Loan origination activity .
Our business is dependent on the general demand for, and value of, commercial real estate and related services, particularly multifamily, which are sensitive to long-term mortgage interest rates and other macroeconomic conditions and the continued existence of the GSEs.
Our business is dependent on the general demand for, and value of, commercial real estate and related services, particularly multifamily, which are sensitive to long-term mortgage interest rates and other macroeconomic conditions and the continued existence of the GSEs multifamily business.
Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure.
Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure.
Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure.
Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure.
When a Fannie Mae DUS loan is subject to full risk-sharing, we absorb losses on the first 5% of the unpaid principal balance of a loan at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss capped at 20% of the original unpaid principal balance of the loan (subject to doubling or tripling if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae).
When a Fannie Mae DUS loan is subject to full risk-sharing, we absorb losses on the first 5% of the unpaid principal balance of a loan at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss capped at 20% of the original loan amount (subject to doubling or tripling if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae).
Our cash flows from operations are impacted by the fees generated by our loan originations and property sales, the timing of loan closings, and the period of time loans are held for sale in the warehouse loan facility prior to delivery to the investor. Cash Flows from Investing Activities We usually lease facilities and equipment for our operations.
Our cash flows from operating activities are impacted by the fees generated by our loan originations and property sales, the timing of loan closings, and the period of time loans are held for sale in the warehouse loan facility prior to delivery to the investor. Cash Flows from Investing Activities We usually lease facilities and equipment for our operations.
Financial Condition Cash Flows from Operating Activities Our cash flows from operations are generated from loan sales, servicing fees, placement fees, net warehouse interest income, property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan origination and operating costs.
Financial Condition Cash Flows from Operating Activities Our cash flows from operating activities are generated from loan sales, servicing fees, placement fees, net warehouse interest income, property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan origination and operating costs.
This segment also provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various investors. The CM segment also provides real estate-related investment banking and advisory services, including housing market research.
This segment also provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various lenders and investors. The CM segment also provides real estate-related investment banking and advisory services, including housing market research.
Demand for multifamily and other commercial real estate generally increases during stronger economic environments, resulting in increased property values, transaction volumes, and loan origination volumes. During weaker economic environments, multifamily and other commercial real estate may experience higher property vacancies, lower demand and reduced values.
Demand for multifamily and other commercial real estate generally increases during stronger economic environments, resulting in increased property values, property sales, transaction volumes, and loan origination volumes. During weaker economic environments, multifamily and other commercial real estate may experience higher property vacancies, lower demand and reduced values.
Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. 45 Table of Contents Non-GAAP Financial Measure ​ A reconciliation of adjusted EBITDA for our Capital Markets segment is presented below.
Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. ​ 47 Table of Contents Non-GAAP Financial Measure ​ A reconciliation of adjusted EBITDA for our Capital Markets segment is presented below.
The profitability of our LIHTC operations is impacted by the demand for and the financial performance of the affordable housing market and the continued existence of income tax credits for these properties.
The profitability of our LIHTC operations is impacted by the demand for and the financial performance of the affordable housing market and the continued existence of federal income tax credits for these properties.
Sources of Liquidity: Warehouse Facilities and Notes Payable Warehouse Facilities We utilize a combination of warehouse facilities and notes payable to provide funding for our operations. We utilize warehouse facilities to fund our Agency Lending and Interim Loan Program.
Sources of Liquidity: Warehouse Facilities and Note Payable Warehouse Facilities We utilize a combination of warehouse facilities and notes payable to provide funding for our operations. We utilize warehouse facilities to fund our Agency Lending and Interim Loan Program.
We originate loans under the DUS program with various terms generally ranging from several years to 15 years; each of these various loan terms has a different runoff rate. The runoff rates applied to each vintage and contractual maturity term is determined using historical data; however, changes in prepayment and amortization behavior may significantly impact the estimate.
We originate loans under the DUS program with various terms generally ranging from several years to 15 years; each of these various loan terms has a different runoff rate. The runoff rates applied to each vintage and contractual maturity term are determined using historical data; however, changes in prepayment and amortization behavior may significantly impact the estimate.
Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. 51 Table of Contents Non-GAAP Financial Measure A reconciliation of adjusted EBITDA for our Corporate segment is presented below.
Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. 53 Table of Contents Non-GAAP Financial Measure A reconciliation of adjusted EBITDA for our Corporate segment is presented below.
Our cash flows from investing activities also include the funding and repayment of loans held for investment, contributions to and distributions from joint ventures, purchases of equity-method investments, and the purchase of available-for-sale (“AFS”) securities pledged to Fannie Mae. ​ Cash Flows from Financing Activities We use our warehouse loan facilities and, when necessary, our corporate cash to fund loan closings, both for loans held for sale and loans held for investment.
Our cash flows from investing activities also include the funding and repayment of loans held for investment, including repurchased loans, contributions to and distributions from joint ventures, purchases of equity-method investments, and the purchase of available-for-sale (“AFS”) securities pledged to Fannie Mae. ​ Cash Flows from Financing Activities We use our warehouse loan facilities and, when necessary, our corporate cash to fund loan closings, both for loans held for sale and loans held for investment.
Multifamily Lending, Commercial Real Estate Brokerage Services and Property Sales We originate and sell multifamily loans through the programs of Fannie Mae, Freddie Mac, Ginnie Mae, and HUD, with which we have licenses and long-established relationships. We retain servicing rights and asset management responsibilities on nearly all loans that we originate for the Agencies’ programs.
Multifamily Lending, Commercial Real Estate Brokerage Service, and Property Sales We originate and sell multifamily loans through the programs of Fannie Mae, Freddie Mac, Ginnie Mae, and HUD, with which we have licenses and long-established relationships. We retain servicing rights and asset management responsibilities on nearly all loans that we originate for the Agencies’ programs.
Also included in our servicing portfolio is $10.5 billion of multifamily HUD loans, the 4 th largest HUD primary and servicing portfolio in the nation according to the Survey. Through WDIS, we offer property sales brokerage services to owners and developers of multifamily properties that are seeking to sell these properties.
Also included in our servicing portfolio is $10.8 billion of multifamily HUD loans, the 4 th largest HUD primary and servicing portfolio in the nation according to the Survey. Through WDIS, we offer property sales brokerage services to owners and developers of multifamily properties that are seeking to sell these properties.
We continually seek opportunities to complete additional acquisitions if we believe the economics are favorable. ​ In February 2023, our Board of Directors approved a stock repurchase program that permitted the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning February 23, 2023.
We continually seek opportunities to complete additional acquisitions if we believe the economics are favorable. ​ In February 2024, our Board of Directors approved a stock repurchase program that permitted the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning February 23, 2024.
Our annual results have fluctuated in the past and are expected to fluctuate in the future, reflecting the interest-rate environment, the volume of transactions, business acquisitions, regulatory actions, and general economic conditions. Discussions of our results of operations and comparisons between 2022 and 2021 can be found in “Item 7.
Our annual results have fluctuated in the past and are expected to fluctuate in the future, reflecting the interest-rate environment, the volume of transactions, business acquisitions, regulatory actions, and general economic conditions. Discussions of our results of operations and comparisons between 2023 and 2022 can be found in “Item 7.
Actual results may differ from those estimates and assumptions and the use of different judgments and assumptions may have a material impact on our results. The following critical accounting estimates involve significant estimation uncertainty that may have or are reasonably likely to have a material impact on our financial condition or results of operations.
Actual results may differ from those estimates and assumptions and the use of different judgments and assumptions may have a material impact on our results. The following critical accounting estimates involve significant estimation uncertainty that may have or is reasonably likely to have a material impact on our financial condition or results of operations.
Additional information about our critical accounting estimates and other significant accounting policies are discussed in NOTE 2 of the consolidated financial statements. Mortgage Servicing Rights (“MSRs”). MSRs are recorded at fair value at loan sale.
Additional information about our critical accounting estimates and other significant accounting policies is discussed in NOTE 2 of the consolidated financial statements. Mortgage Servicing Rights. MSRs are recorded at fair value at loan sale.
WDIP is a registered investment advisor and general partner of private commercial real estate investment funds focused on the management of debt, preferred equity, and mezzanine equity investments through private middle-market commercial real estate funds and separately managed accounts.
WDIP is a registered investment adviser and general partner of private commercial real estate investment funds focused on the management of debt, preferred equity, and mezzanine equity investments through private middle-market commercial real estate funds and separately managed accounts.
Other transaction-related sources of revenue include (i) net warehouse interest income we earn while the loan is held for sale, (ii) net warehouse interest income from loans held for investment while they are outstanding, (iii) sales commissions for brokering the sale of multifamily properties, and (iv) syndication and transaction-based asset management fees from our investment management activities.
Other transaction-related sources of revenue include (i) net warehouse interest income we earn or expense we incur while the loan is held for sale, (ii) net warehouse interest income from loans held for investment while they are outstanding, (iii) sales commissions for brokering the sale of multifamily properties, and (iv) syndication and transaction-based asset management fees from our investment management activities.
Through these property sales brokerage services, we seek to maximize proceeds and certainty of closure for our clients using our knowledge of the commercial real estate and capital markets and relying on our experienced transaction professionals. Our property sales 28 Table of Contents services are offered in various regions throughout the United States and cover many major markets.
Through these property sales brokerage services, we seek to maximize proceeds and certainty of closure for our clients using our knowledge of the commercial real estate and capital markets and relying on our experienced transaction professionals. Our property sales services are offered in various regions throughout the United States and cover many major markets.
The estimated net cash flows from servicing, which includes assumptions for discount rate, earnings on escrow accounts (placement fees), prepayment speeds, and servicing costs, are discounted using a discounted cash flow model at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the underlying loan.
The estimated net cash flows from servicing, which includes assumptions for discount rate, placement fees on escrow accounts (“placement fees”), prepayment speeds, and servicing costs, are discounted using a discounted cash flow model at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the underlying loan.
We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital. We are in compliance with the December 31, 2023 collateral requirements as outlined above.
We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital. We are in compliance with the December 31, 2024 collateral requirements as outlined above.
Our model for MSRs assumes no prepayment prior to the expiration of the prepayment provisions and full prepayment of the loan at or near the point when the prepayment provisions have expired. The estimated net cash flows also include cash flows related to the future earnings on the escrow accounts associated with servicing the loans.
Our model for MSRs assumes no prepayment prior to the expiration of the prepayment provisions and full prepayment of the loan at or near the point when the prepayment provisions have expired. The estimated net cash flows also include cash flows related to the future earnings from placement of escrow accounts associated with servicing the loans.
As a result, a rise in defaults on loans in our at-risk portfolio could have a material adverse effect on us, including our profitability and liquidity. ​ ● The Price of Loans in the Secondary Market. Our profitability is determined in part by the price we are paid for the loans we originate.
As a result, a rise in defaults on loans in our at-risk portfolio could have a material adverse effect on us, including our profitability and liquidity. ​ 34 Table of Contents ● The Price of Loans in the Secondary Market. Our profitability is determined in part by the price we are paid for the loans we originate.
Consolidated Results of Operations The following is a discussion of the comparison of our results of operations for the years ended December 31, 2023 and 2022. The financial results are not necessarily indicative of future results.
Consolidated Results of Operations The following is a discussion of the comparison of our results of operations for the years ended December 31, 2024 and 2023. The financial results are not necessarily indicative of future results.
Other loans that have defaulted but not foreclosed or that are not probable of foreclosure are not included here. Additionally, loans that have foreclosed or are probable of foreclosure but are not expected to result in a loss to the Company are not included here.
Other loans that are delinquent but not foreclosed or that are not probable of foreclosure are not included here. Additionally, loans that have foreclosed or are probable of foreclosure but are not expected to result in a loss to the Company are not included here.
The decrease in the average servicing fee rates were the result of decreases in the WASF on our new Fannie Mae debt financing volume over the past year as the volatility in the interest rate environment compressed the spread on our debt financing volume and reduced the servicing fee rates on loans originated in 2023.
The decrease in the average servicing fee rates were the result of decreases in the WASF on our new Fannie Mae debt financing volume over the past year as the volatility in the interest rate environment compressed the spread on our debt financing volume and reduced the servicing fee rates on loans originated over the past two years.
Absent additional significant legislative changes to statutory tax rates (particularly the federal tax rate), we expect low deviation from the 2023 combined statutory tax rate for future years.
Absent additional significant legislative changes to statutory tax rates (particularly the federal tax rate), we expect low deviation from the 2024 combined statutory tax rate for future years.
Through December 31, 2023 we did not repurchase any shares under the 2023 stock repurchase program and had $75.0 million of remaining capacity under that program.
Through December 31, 2024, we did not repurchase any shares under the 2024 stock repurchase program and had $75.0 million of remaining capacity under that program.
Adjusted EBITDA represents net income before income taxes, interest expense on our corporate debt, and amortization and depreciation, adjusted for provision (benefit) for credit losses, net write-offs, stock-based incentive compensation charges, the fair value of expected net cash flows from servicing, net, the write off of unamortized balance of premium associated with the repayment of a portion of our corporate debt, the gain from revaluation of a previously held equity-method investment, goodwill impairment, and contingent consideration liability fair value adjustments when the fair value adjustment is a triggering event for a goodwill impairment assessment.
Adjusted EBITDA represents net income before income taxes, interest expense on our corporate debt, and amortization and depreciation, adjusted for provision (benefit) for credit losses, net write-offs based on the final resolution of the defaulted loans or collateral, stock-based incentive compensation charges, the fair value of expected net cash flows from servicing, net, the write off of unamortized balance of premium associated with the repayment of a portion of our corporate debt, the gain from revaluation of a previously held equity-method investment, goodwill impairment, and contingent consideration liability fair value adjustments when the fair value adjustment is a triggering event for a goodwill impairment assessment.
Use of the at-risk portfolio provides for comparability of the full risk-sharing and modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at-risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at-risk portfolio.
Use of the at-risk portfolio provides for comparability of the full risk-sharing and 56 Table of Contents modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at-risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at-risk portfolio.
Such loans are held for short periods of time, generally less than 60 days, and impact cash flows presented as of a point in time due to the timing difference between the date of origination and date of delivery.
Agency loans originated are held for short periods of time, generally less than 60 days, and impact cash flows presented as of a point in time due to the timing difference between the date of origination and date of delivery.
The fair value at loan sale (“MSR”) is based on estimates of expected net cash flows associated with the servicing rights and takes into consideration an estimate of loan prepayment. Initially, 29 Table of Contents the fair value amount is included as a component of the derivative asset fair value at the loan commitment date.
The fair value at loan sale is based on estimates of expected net cash flows associated with the servicing rights and takes into consideration an estimate of loan prepayment. Initially, the fair value amount is included as a component of the derivative asset fair value at the loan commitment date.
Treasuries is discounted 5%, and Agency mortgage-backed securities (“MBS”) are discounted 4% for purposes of calculating compliance with the collateral requirements. As of December 31, 2023, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $142.8 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans.
Treasuries is discounted 5%, and Agency mortgage-backed securities (“MBS”) are discounted 4% for purposes of calculating compliance with the collateral requirements. As of December 31, 2024, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $183.4 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans.
We evaluate our risk-sharing loans on a quarterly basis to determine whether there are loans that are probable of default. Specifically, we assess a loan’s qualitative and quantitative risk factors, such as payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio, and property condition.
We evaluate our risk-sharing loans on a quarterly basis to determine whether there are loans that are probable of foreclosure and thus collateral dependent. Specifically, we assess a loan’s qualitative and quantitative risk factors, such as payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio, and property condition.
The maximum exposure is not representative of the actual loss we would incur. (4) Defaulted loans represent loans in our Fannie Mae at-risk portfolio which are probable of foreclosure or that have foreclosed and for which the Company has recorded a collateral-based reserve (i.e., loans where we have assessed a probable loss).
The maximum exposure is not representative of the actual loss we would incur. (4) Defaulted loans represent loans in our Fannie Mae at-risk portfolio or Freddie Mac SBL pre-securitized portfolio that are probable of foreclosure or that have foreclosed and for which the Company has recorded a collateral-based reserve (i.e., loans where we have assessed a probable loss).
For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.” 37 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents a year-over-year comparison of our financial results for the years ended December 31, 2023 and 2022.
For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.” 38 Table of Contents ​ Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents a year-over-year comparison of our financial results for the years ended December 31, 2024 and 2023.
We issue stock primarily in connection with exercise of stock options and for acquisitions (non-cash transactions). ​ 41 Table of Contents Years Ended December 31, 2023 Compared to Years Ended December 31, 2022 The following table presents a year-over-year comparison of the significant components of cash flows for the year ended December 31, 2023 and 2022.
We issue stock primarily in connection with the exercise of stock options and for acquisitions (non-cash transactions). ​ 42 Table of Contents Years Ended December 31, 2024 Compared to Years Ended December 31, 2023 The following table presents a year-over-year comparison of the significant components of cash flows for the year ended December 31, 2024 and 2023.
Except as described in 55 Table of Contents the following paragraph, the maximum amount of risk-sharing obligations we absorb at the time of default is generally 20% of the origination unpaid principal balance (“UPB”) of the loan. ​ ​ ​ ​ Risk-Sharing Losses Percentage Absorbed by Us ​ First 5% of UPB at the time of loss settlement ​ 100% ​ Next 20% of UPB at the time of loss settlement ​ 25% ​ Losses above 25% of UPB at the time of loss settlement ​ 10% ​ Maximum loss 20% of origination UPB ​ Fannie Mae can double or triple our risk-sharing obligation if the loan does not meet specific underwriting criteria or if a loan defaults within 12 months of its sale to Fannie Mae.
Except as described in the following paragraph, the maximum amount of risk-sharing obligations we absorb at the time of default is generally 20% of the origination UPB of the loan. ​ ​ ​ ​ Risk-Sharing Losses Percentage Absorbed by Us ​ First 5% of UPB at the time of loss settlement ​ 100% ​ Next 20% of UPB at the time of loss settlement ​ 25% ​ Losses above 25% of UPB at the time of loss settlement ​ 10% ​ Maximum loss 20% of origination UPB ​ Fannie Mae can double or triple our risk-sharing obligation if the loan does not meet specific underwriting criteria or if a loan defaults within 12 months of its sale to Fannie Mae.
The fair value of the earnout is recorded as a contingent consideration liability and included within Other liabilities in the Consolidated Balance Sheet and adjusted to the estimated fair value at the end of each reporting period. ​ The determination of the fair value of contingent consideration liabilities requires significant management judgment and unobservable inputs to (i) determine forecasts and scenarios of future revenues, net cash flows and certain other performance metrics, (ii) assign a probability of achievement for the forecasts and scenarios, and (iii) select a discount rate.
The fair value of the earnout is recorded as a contingent consideration liability and included within Other liabilities in the Consolidated Balance Sheet and adjusted to the estimated fair value periodically. ​ The determination of the fair value of contingent consideration liabilities requires significant management judgment and unobservable inputs to (i) determine forecasts and scenarios of future revenues, net cash flows and certain other performance metrics, (ii) assign a probability of achievement for the forecasts and scenarios, and (iii) select a discount rate.
When a loan is determined to be probable of default based on these factors, we remove the loan from the WARM calculation and individually assess the loan for potential credit loss. This assessment requires certain judgments and assumptions to be made regarding the property values and other factors, that may differ significantly from actual results.
When a loan is determined to be probable of foreclosure based on these factors (or has foreclosed), we remove the loan from the WARM calculation and individually assess the loan for potential credit loss. This assessment requires certain judgments and assumptions to be made regarding the property values and other factors that may differ significantly from actual results.
The total principal balance for such debt was $1.4 billion as of December 31, 2023, of which $596.4 million will be repaid with the proceeds from the sale of loans held for sale and the repayments of loans held for investment. NOTE 6 in the consolidated financial statements contains additional details related to these future debt payments.
The total principal balance for such debt was $1.4 billion as of December 31, 2024, of which $592.5 million will be repaid with the proceeds from the sale of loans held for sale and the repayments of loans held for investment. NOTE 6 in the consolidated financial statements contains additional details related to these future debt payments.
Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and 53 Table of Contents unrestricted portions of the required reserves each year. We satisfied these requirements as of December 31, 2023.
Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and 55 Table of Contents unrestricted portions of the required reserves each year. We satisfied these requirements as of December 31, 2024.
The increase was primarily attributable to an increase in the average servicing portfolio period over period as shown below, slightly offset by a decline in the average servicing fee rates. The increase in the average servicing portfolio was driven by the $4.5 billion increase in Fannie Mae and the $1.5 billion increase in Freddie Mac loans serviced.
The increase was primarily attributable to an increase in the average servicing portfolio period over period as shown below, slightly offset by a decline in the average servicing fee rates. The increase in the average servicing portfolio was driven primarily by the $4.5 billion increase in Fannie Mae loans serviced.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains a discussion of the risk-sharing caps we have with Fannie Mae. We regularly monitor the credit quality of all loans for which we have a risk-sharing obligation.
The “Business” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains a discussion of the risk-sharing caps we have with Fannie Mae. We regularly monitor the credit quality of all loans for which we have a risk-sharing obligation.
We broker and service loans for many life insurance companies, commercial banks, and other institutional investors, in which cases we do not fund the loan but rather act as a loan broker.
We broker and service loans for many life insurance companies, commercial banks, and other institutional 28 Table of Contents investors, in which cases we do not fund the loan but rather act as a loan broker.
(3) MSR Income as a percentage of Agency debt financing volume. ​ The decrease in origination fees were primarily the result of the 45% decrease in debt financing volume, partially offset by a 17-basis-point increase in our origination fee rate.
(3) MSR Income as a percentage of Agency debt financing volume. ​ The increase in origination fees were primarily the result of the 23% increase in debt financing volume, partially offset by a five-basis-point decrease in our origination fee rate.
We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program, our only off-balance sheet arrangement. We are required to secure this obligation by assigning collateral to Fannie Mae. We meet this obligation by assigning pledged securities to Fannie Mae.
We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program, which is an off-balance sheet arrangement. We are required to secure this obligation by assigning collateral to Fannie Mae. We meet this obligation by assigning pledged securities to Fannie Mae.
Due to the relatively few transactions in the multifamily MSR market and the lack of significant changes in assumptions by market participants, we have observed limited variation or change in the assumptions historically and do not expect to observe significant changes in the foreseeable future, including the assumption that most significantly impacts the estimate: the discount rate.
Due to the relatively few transactions in the multifamily MSR market and the lack of significant changes in assumptions by market participants, we have experienced limited volatility in the assumptions historically and do not expect to observe significant changes in the foreseeable future, including the assumption that most significantly impacts the estimate: the discount rate.
As of December 31, 2023, reserve requirements for the December 31, 2023 DUS loan portfolio will require us to fund $77.1 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio.
As of December 31, 2024, reserve requirements for the December 31, 2024 DUS loan portfolio will require us to fund $71.5 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio.
As of December 31, 2023, our assessment of the remaining goodwill at each of our other reporting units, totaling $745.7 million, indicates they are not impaired (NOTE 7 of the consolidated financial statements details changes the in goodwill balance) .
As of December 31, 2024, our assessment of the remaining goodwill at each of our other reporting units, totaling $787.9 million, indicates they are not impaired (NOTE 7 of the consolidated financial statements details the changes in the goodwill balance).
As of December 31, 2023, we did not fully fund any such loans.
As of December 31, 2024, we did not fully fund any such loans.
As the weighted-average annual loss rate utilizes a rolling 10-year look-back period, the loss rate used in the estimate will change as loss data from earlier periods in the look-back period continue to fall off and as new loss data are added.
As the weighted-average annual loss rate utilizes a rolling ten-year look-back period, the loss rate used in the estimate will change as loss data from earlier periods in the look-back period continue to roll off as new loss data are added.
For example, an increase in loan origination volume for our two highest-margin products, Fannie Mae and HUD loans, without a change in total loan origination volume would increase our overall profitability, while a decrease in the loan origination volume of these two products without a change in total loan origination volume would decrease our overall profitability, all else being equal. 34 Table of Contents ● The Affordable Housing Market.
For example, an increase in loan origination volume for our two highest-margin products, Fannie Mae and HUD loans, without a change in total loan origination volume would increase our overall profitability, while a decrease in the loan origination volume of these two products without a change in total loan origination volume would decrease our overall profitability, all else being equal.
These sensitivities are hypothetical and should be used with caution as they do not include interplay among assumptions. ​ 31 Table of Contents The aggregate fair value of our contingent consideration liabilities as of December 31, 2023 was $113.5 million.
These sensitivities are hypothetical and should be used with caution as they do not include interplay among assumptions. ​ The aggregate fair value of our contingent consideration liabilities as of December 31, 2024 was $30.5 million.
Changes in our discount rate assumptions on existing and outstanding MSRs may materially impact the fair value of the MSRs disclosure (NOTE 3 of the consolidated financial statements details the portfolio-level impact of a change in the discount rate). Allowance for Risk-Sharing Obligations.
Changes in our discount rate and placement fee rate assumptions on existing and outstanding MSRs may materially impact the fair value of our MSRs (NOTE 3 of the consolidated financial statements details the portfolio-level impact of hypothetical changes in the discount rate and placement fee rate). Allowance for Risk-Sharing Obligations.
Over the past three years, we have adjusted the earnings on escrow accounts assumption several times to reflect the current and expected future earnings rate projected for the life of the MSR as the interest rate environment has experienced significant volatility over the past several years.
Over the past several years, we have adjusted the placement fee rate assumption several times to reflect the current and expected future earnings rate projected for the life of the MSR as the interest rate environment has experienced significant volatility over the past several years.
For the years presented in the Consolidated Statements of Income, the amortization of intangible assets relates primarily to intangible assets associated with our acquisitions in 2021 and 2022. Provision (Benefit) for Credit Losses. The provision (benefit) for credit losses consists primarily of the provision associated with our risk-sharing loans.
For the years presented in the Consolidated Statements of Income, the amortization of intangible assets relates primarily to intangible assets associated with our acquisitions in 2021 and 2022. Provision (benefit) for credit losses. The provision (benefit) for credit losses consists primarily of the provision associated with our risk-sharing loans, including pre-securitized Freddie Mac SBL loans.
We have not experienced significant changes in the runoff rate since we implemented CECL in 2020. 30 Table of Contents The weighted-average annual loss rate is currently calculated using a 10-year look-back period, utilizing the average portfolio balance and settled losses for each year.
We have not experienced significant changes in the runoff rate since we implemented CECL in 2020. The weighted-average annual loss rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year.
In February 2024, our Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million shares of our common stock over a 12-month period beginning February 23, 2024. ​ We have contractual obligations to make future cash payments on lease agreements on our various offices of $101.4 million as of December 31, 2023.
In February 2025, our Board of Directors again approved a stock repurchase program that permits the repurchase of up to $75.0 million shares of our common stock over a 12-month period beginning February 21, 2025. ​ We have contractual obligations to make future cash payments on lease agreements on our various offices of $131.8 million as of December 31, 2024.
For example, in the first quarter of 2023, loss data from earlier periods in the look-back period with significantly higher losses fell off and were replaced with more recent loss data, resulting in the weighted-average historical annual loss rate changing from 1.2 basis points to 0.6 basis points.
For example, in the first quarter of 2024, loss data from earlier periods in the look-back period with significantly higher losses rolled off and were replaced with more recent loss data with fewer losses, resulting in the weighted-average historical annual loss rate changing from 0.6 basis points to 0.3 basis points.
For the ten-year period from January 1, 2013 through December 31, 2023, we recognized net write-offs of risk-sharing obligations of $15.3 million, or an average of less than one basis point annually of the average at risk Fannie Mae portfolio balance.
For the ten-year period from January 1, 2014 through December 31, 2024, we recognized net write-offs of risk-sharing obligations of $10.0 million, or an average of less than one basis point annually of the average at risk Fannie Mae portfolio balance.
The expected interest associated with these debt payments is $70.7 million in 2024, $60.6 million in 2025, $59.9 million in 2026, $59.3 million in 2027, and $58.8 million in 2028. The future interest for long-term debt is based on a variable rate; therefore, the preceding interest payments are calculated based on the effective interest rate as of December 31, 2023.
The expected interest associated with these debt payments is $58.8 million in 2025, $51.7 million in 2026, $51.1 million in 2027, and $50.6 million in 2028. The future interest for long-term debt is based on a variable rate; therefore, the preceding interest payments are calculated based on the effective interest rate as of December 31, 2024.
Any prepayment fees received are included in Other revenues . HUD has the right to terminate our current servicing engagements for cause. In addition to termination for cause, Fannie Mae and Freddie Mac may terminate our servicing engagements without cause by paying a termination fee.
Accordingly, we currently do not hedge our servicing portfolio for prepayment risk. Any prepayment fees received are included in Other revenues . HUD has the right to terminate our current servicing engagements for cause. In addition to termination for cause, Fannie Mae and Freddie Mac may terminate our servicing engagements without cause by paying a termination fee.
For example, a 10% change in the forecasted loss rate as of December 31, 2023 would have increased or decreased the allowance for risk-sharing obligations by 6%. A 20% change in the forecasted loss rate as of December 31, 2023 would have increased or decreased the allowance for risk-sharing obligations by 13%.
For example, a 10% change in the forecasted loss rate as of December 31, 2024 would have increased or decreased the allowance for risk-sharing obligations by 8%. A 20% change in the forecasted loss rate as of December 31, 2024 would have increased or decreased the allowance for risk-sharing obligations by 16%.
A collateral-based reserve is recorded when it is probable that a risk-sharing loan will foreclose or has foreclosed, and a reserve for estimated credit losses and a guaranty obligation are recorded for all other risk-sharing loans.
A collateral-based reserve is recorded when it is probable that a risk-sharing loan will foreclose or has foreclosed and it is expected to result in a loss for the Company, and a reserve for estimated credit losses and a guaranty obligation are recorded for all other risk-sharing loans.
Our market share with Fannie Mae and Freddie Mac was 11.3% on a combined basis, by loan deliveries in 2023, compared to 12.7% in 2022. Additionally, we were the 5 th largest overall lender for HUD in 2023 .
Our market share with Fannie Mae and Freddie Mac was 10.7% on a combined basis, by loan deliveries in 2024, compared to 11.3% in 2023. Additionally, we were the 2 nd largest overall lender for HUD in 2024 .
A component of our origination related revenues is the premium we recognize on the sale of a loan. Stronger investor demand typically results in larger premiums while weaker demand results in little to no premium. ​ ● Market for Servicing Commercial Real Estate Loans.
A component of our origination related revenues is the premium we recognize on the sale of a loan. Stronger investor demand typically results in larger premiums while weaker demand results in little to no premium.
(2) For the year ended December 31, 2023, includes goodwill impairment of $62.0 million and contingent consideration fair value adjustment of $62.5 million.
(2) For the year ended December 31, 2024, includes goodwill impairment of $33.0 million and contingent consideration fair value adjustment of $34.5 million.
As of December 31, 2023, we were required to maintain at least $60.7 million of liquid assets to meet our operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders. As of December 31, 2023, we had operational liquidity of $225.0 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.
As of December 31, 2024, we were required to maintain at least $64.5 million of liquid assets to meet our operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders. As of December 31, 2024, we had operational liquidity of $253.9 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.
The placement fee rates on escrow deposits and the interest rate on our variable-rate pledged securities investments increased significantly as a result of the higher short-term interest rate environment in 2023 compared to same period in 2022. ​ 48 Table of Contents Other Revenues.
Additionally, the placement fee rates 50 Table of Contents on escrow deposits and the interest rate on our variable-rate pledged securities investments increased slightly as a result of the elevated short-term interest rate environment in 2024 compared to same period in 2023. Other revenues.
(6) As of December 31, 2023, included $132.0 million and $710.0 million of equity under management and assets under management, respectively, of Interim program JV loans. The remainder was composed of WDIP debt funds. As of December 31, 2022, includes $169.4 million and $892.8 million of equity under management and assets under management, respectively, of Interim program JV loans.
(6) As of December 31, 2024, included $46.0 million and $173.0 million of equity under management and assets under management, respectively, of Interim program JV loans. The remainder was composed of WDIP debt funds. As of December 31, 2023, includes $132.0 million and $710.0 million of equity under management and assets under management, respectively, of Interim program JV loans.
Corporate debt and the related interest expense are allocated first based on specific acquisitions where debt was directly used to fund the acquisition, such as the acquisition of Alliant, and then based on the remaining segment assets.
We do allocate interest expense and income tax expense. Corporate debt and the related interest expense are allocated first 52 Table of Contents based on specific acquisitions where debt was directly used to fund the acquisition, such as the acquisition of Alliant, and then based on the remaining segment assets.
WDIP’s current AUM of $1.5 billion primarily consist of six sources: Fund III, Fund IV, Fund V, Fund VI, and Fund VII (collectively, the “Funds”), and separate accounts managed for life insurance companies. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments.
WDIP’s current AUM of $2.3 billion primarily consist of eight sources: Fund III, Fund IV, Fund V, Fund VI, Fund VII, Debt Fund I, and Debt Fund II (collectively, the “Funds”), and separate accounts managed for life insurance companies. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments.
They are based on contractual terms, are earned over the life of the loan, and are generally not subject to significant prepayment risk. Our Fannie Mae and Freddie Mac servicing agreements generally provide for prepayment fees in the event of a voluntary prepayment. Accordingly, we currently do not hedge our servicing portfolio for prepayment risk.
Our servicing fees on loans we originate provide a stable revenue stream. They are based on contractual terms, are earned over the life of the loan, and are generally not subject to significant prepayment risk. Our Fannie Mae and Freddie Mac servicing agreements generally provide for prepayment fees in the event of a voluntary prepayment.
The increase in the origination fee rate was driven by an increase in GSE debt financing volume as a percentage of total debt financing volume as seen above. GSE debt financing volume has higher origination fees than brokered debt financing volume.
The decrease in the origination fee rate was driven by an increase in brokered debt financing volume as a percentage of total debt financing volume as seen above.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+2 added−4 removed3 unchanged
Biggest changeIn January 2023, our Corporate Debt increased by $200 million. The following table shows the impact on our annual earnings due to a 100-basis point increase and decrease in SOFR as of December 31, 2023 and 2022, based on our current and previous notes payable balance outstanding at each period end.
Biggest changeThe following table shows the impact on our annual earnings due to a 100-basis point increase and decrease in SOFR as of December 31, 2024 and 2023, based on our current and previous notes payable balance outstanding at each period end. ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ As of December 31, ​ Change in annual income from operations due to: 2024 2023 ​ 100 basis point increase in SOFR ​ $ (7,785) ​ $ (7,865) ​ 100 basis point decrease in SOFR ​ 7,785 ​ 7,865 ​ ​ Market Value Risk The fair value of our MSRs is subject to market-value risk.
The following table shows the impact on our annual placement fees due to a 100-basis point increase and decrease in EFFR based on our escrow balances outstanding at each period end.
The following table shows the impact on our annual placement fees revenues due to a 100-basis point increase and decrease in EFFR based on our escrow balances outstanding at each period end.
A portion of these changes in earnings as a result of a 100-basis point increase in the EFFR would be delayed several months due to the negotiated nature of some of our escrow arrangements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ Change in annual placement fee revenue due to: (in thousands) 2023 2022 100 basis point increase in EFFR ​ $ 26,827 ​ $ 26,933 ​ 100 basis point decrease in EFFR ​ (26,827) ​ (26,933) ​ The borrowing cost of our warehouse facilities used to fund loans held for sale is based on SOFR.
A portion of these changes in earnings as a result of a 100-basis point increase in the EFFR would be delayed by several months due to the negotiated nature of some of our placement arrangements. ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ As of December 31, ​ Change in annual placement fee revenue due to: 2024 2023 100 basis point increase in EFFR ​ $ 26,938 ​ $ 26,827 ​ 100 basis point decrease in EFFR ​ (26,938) ​ (26,827) ​ The borrowing cost of our warehouse facilities used to fund loans held for sale is based on SOFR.
The changes shown below do not reflect an increase or decrease in the interest rate earned on our loans held for sale. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ Change in annual net warehouse interest income due to: (in thousands) 2023 2022 ​ 100 basis point increase in SOFR ​ $ (5,851) ​ $ (3,986) ​ 100 basis point decrease in SOFR ​ 5,851 ​ 3,986 ​ Our Corporate Debt is based on Adjusted Term SOFR as of December 31, 2023.
The changes shown below do not reflect an increase or decrease in the interest rate earned on our loans held for sale. ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ As of December 31, ​ Change in annual net warehouse interest income due to: 2024 2023 ​ 100 basis point increase in SOFR ​ $ (6,196) ​ $ (5,851) ​ 100 basis point decrease in SOFR ​ 6,196 ​ 5,851 ​ Our Corporate Debt is based on Adjusted Term SOFR as of December 31, 2024.
A 100-basis point increase or decrease in the weighted average discount rate would decrease or increase, respectively, the fair value of our MSRs by approximately $44.0 million as of December 31, 2023 compared to $43.4 million as of December 31, 2022.
A 100-basis point increase or decrease in the weighted average discount rate would decrease or increase, respectively, the fair value of our MSRs by approximately $41.9 million as of December 31, 2024, compared to $44.0 million as of December 31, 2023.
Some of our assets and liabilities are subject to changes in interest rates. Earnings from escrows generally track the effective Federal Funds Rate (“EFFR”). The EFFR was 533 basis points and 433 basis points as of December 31, 2023 and 2022, respectively.
Some of our assets and liabilities are subject to changes in interest rates. Placement fee revenue from escrow deposits generally track the effective Federal Funds Rate (“EFFR”). The EFFR was 433 basis points and 533 basis points as of December 31, 2024 and 2023, respectively.
As of 57 Table of Contents December 31, 2023 and December 31, 2022, 90% of the servicing fees are protected from the risk of prepayment through prepayment provisions; given this significant level of prepayment protection, we do not hedge our servicing portfolio for prepayment risk.
As of December 31, 2024 and December 31, 2023, 90% of the loans for which we earn servicing fees are protected from the risk of prepayment through prepayment provisions; given this significant level of prepayment protection, we do not hedge our servicing portfolio for prepayment risk.
The following table shows the impact on our annual net warehouse interest income due to a 100-basis point increase and decrease in SOFR, based on our warehouse borrowings outstanding at each period end.
The base SOFR was 449 basis points and 538 basis points as of December 31, 2024 and 2023, respectively. The following table shows the impact on our annual net warehouse interest income due to a 100-basis point increase and decrease in SOFR, based on our warehouse borrowings outstanding at each period end.
Removed
The base SOFR was 538 basis points and 430 basis points as of December 31, 2023 and 2022, respectively. The interest income on our loans held for investment is based on SOFR. The SOFR reset date for loans held for investment is the same date as the SOFR reset date for the corresponding warehouse facility.
Added
In January 2023, our Corporate Debt increased by $200 million.
Removed
The Alliant note payable as of December 31, 2022 was fixed-rate note; therefore, there was no impact to our earnings related to this debt when interest rates change as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ Change in annual income from operations due to: (in thousands) 2023 2022 ​ 100 basis point increase in SOFR ​ $ (7,865) ​ $ (5,940) ​ 100 basis point decrease in SOFR ​ 7,865 ​ 5,940 ​ ​ Market Value Risk The fair value of our MSRs is subject to market-value risk.
Added
Additionally, a 50-basis point increase or decrease in the placement fee rates would increase or decrease, respectively, the fair value of our MSRs by approximately $49.7 million as of December 31, 2024.
Removed
London Interbank Offered Rate (“LIBOR”) Transition ​ On June 30, 2023, the United Kingdom’s Financial Conduct Authority, the regulator for the administration of LIBOR, stopped publishing LIBOR rates, including the 30-day LIBOR (previously our primary reference rate). All of our legacy GSE LIBOR-based loans transitioned to SOFR effective July 1, 2023, after providing formal notice to all impacted borrowers.
Removed
All of our debt agreements with our warehouse facilities have transitioned to SOFR as of June 30, 202 3.

Other WD 10-K year-over-year comparisons