Fitch Affirms Walker & Dunlop, LLC's Commercial Mortgage Primary Servicer Rating

NEW YORK--()--Fitch Ratings has affirmed Walker & Dunlop's commercial primary servicer rating at 'CPS2'.

The affirmation reflects Fitch's assessment of the company's strong and stable management team, appropriate internal controls bolstered by a fully developed internal audit function, and an effective technology platform. The rating also reflects Walker & Dunlop's private label outsourcing agreement with Midland Loan Services, a division of PNC Bank, National Association (Midland), and the ability to manage contracted services as well as bringing functions in-house on a limited basis. Additionally, the rating reflects the adequate financial condition of the parent, Walker & Dunlop, Inc., to support the servicing platform.

Fitch noted improved turnover statistics in 2015. In 2015, Walker & Dunlop implemented a shadowing program to partner less experienced staff with more experienced staff to foster professional growth and learning opportunities.

As of Dec. 31, 2015, Walker & Dunlop's total servicing portfolio consisted of 4,856 loans totaling over $50 billion, the majority of which were multifamily properties. Walker & Dunlop, headquartered in Bethesda, MD, is the operating subsidiary of Walker & Dunlop, Inc., a public company since 2010. Through its predecessor, founded in 1937, Walker & Dunlop has extensive experience as a mortgage finance company, particularly with multifamily properties. Multifamily properties make up 92% of the servicing portfolio by balance as of Dec. 31, 2015, a trend consistent with prior years. By loan count, the company's largest servicing clients are government-sponsored enterprises (GSEs) and HUD, which together represent approximately 72% of the servicing portfolio. The GSEs form the majority at 58%, which is consistent with prior years. Walker & Dunlop is currently the third largest Fannie Mae servicer and sixth largest Freddie Mac servicer.

The servicer rating is based on the methodology described in Fitch's criteria reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated April 23, 2015, which are available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004700

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Andrew Foster
Director
+1-212-908-0714
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Daniel Chambers
Managing Director
+1-212-908-0782
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Andrew Foster
Director
+1-212-908-0714
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Daniel Chambers
Managing Director
+1-212-908-0782
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com