WD - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Kelsey Duffey

Good morning. I am Kelsey Duffey, Vice President of Investor Relations of Walker & Dunlop. And I would like to welcome you to Walker & Dunlop’s First Quarter 2020 Earnings Conference Call and Webcast. Hosting the call today is Willy Walker, Walker & Dunlop’s Chairman and CEO. He is joined by Steve Theobald, Chief Financial Officer. recorded the replay our Investor being via be website. is on webcast Relations call and will a available Today’s section of computer, bar of [Operator webcast webcast screen. hand are you the on please your icon menu Instructions] raise click bottom accessing the the If on the

metric. forward-looking on made This posted some on call. our meaning Steve as serve a adjusted earnings website release point XXXX. for our historical of the of the and Investor posted Please Statements course and a to the during our Act will statements morning, section These earnings this to Securities deemed to of release. Reform morning. which during call, the EBITDA reference on release facts touch the note statements slides what carefully of read are this maybe language we Investors forward-looking urged of will Willy we Litigation Relations the that non-GAAP metric in our the the reconciliation earnings Please not presentation are website, refer call financial www.walkerdunlop.com. reference this financial non-GAAP for of also Private this will within

risk be otherwise. disclaim can filed obligation More any about the reports or actual Forward-looking our & to statements update information to result new our and forward-looking SEC. expressly events We a of results so. current future or in statements, under no may and factors describe differ with our quarterly information, Walker alter is detailed materially. found expectations Dunlop obligation annual whether as do

Willy. over now will to I the call turn

Willy Walker

and Kelsey good you, morning Thank everyone.

U.S. to several outstanding business the and world produce and made colleagues changed segments: relevant crisis, This you underwriting safe endure our together the well earning rapidly will three years have capital solutions and and COVID-XX healthy. model, continue broken providing live we the W&D of us today staying be call downturn First are the our and the the in pandemic team emerge came transitioned forward, position the in the needed; over investments into fundamentals and and to to has underlying should the other pre-COVID, past more access results; financial we your to up families conservative capital and where W&D economy. have The QX culture where hope and even in our dramatically all we clients. to W&D going stronger where side our clients and foremost,

several expanding year. and in The technology brokers, $XX.X investments footprint, volume XX% solutions of quarter first bankers up QX generated of new last total past years we hiring the transaction new have billion, building the over and made our over national record

an of loan and team, incredible in this billion & is The Dunlop on have of GSE largest debt over was Dunlop’s this transaction on credit for transaction & built slide XX Walker facility whom Walker capabilities shows their properties line over one & had had Winning honor the quarter. of As our the competitors, won this three Dunlop. includes double-digit largest a the $X.X history, Southern Walker Management the Mid-Atlantic in for every Corporation. growth business originations billion in $X books we at brand financing decades. this and reflective

loans winning of the the and structuring massive challenging the deal COVID-XX team difficult the while executed deeply proud in trust am crisis, in under Southern significant this that and facilities, at one thankful circumstances. appreciative of placed exceedingly midst Walker of the long history. the a and credit And I in transaction enormous Management and confidence beyond the & Dunlop company’s properties, all this most all our accomplishments underwriting the loans, accomplishment, and was to W&D was closing the pricing

W&D that transaction size, many in before can and pay to is will of this marquee years effectively of benefits We transactions small have this lenders come. group a execute investors that for on agency told

we Looking quarter, an last year. volume multifamily debt $X healthy financing have and debt start the the business largest of other QX in from ever team year’s XXX% continues role in Brokered at production HUD debt extremely markets, pipeline to brokerage increase HUD we volumes, quarter. first strong and in have of of play the billion our a a very by XX% million originated important in an to QX, second had. financing carrying HUD quarter grew $XXX the to loans

several team. have We potential lending Blackstone our past years of over Capital million the originated the and originated that made JCR in joint remainder excited business through for significant with area the $XX and extremely of volume, million $XXX investing this with are the originated Mortgage about future of Trust. We investments this and of venture principal

discuss quarter, million to EPS taking per is X% Steve $X.XX. our the that share credit sales sales to due COVID-XX in see was future EBITDA model. multi-family of details business reflecting property made very position originations strength robust property $X.X W&D losses earnings billion, QX platform. earnings. charge XX% strong, we to growth have adjusted will diluted extremely during expected the growth generated million for volume we our QX down investments the platform given revenue year, pandemic. across growth national overall on a to potential to reflecting a the was risk his in $XX.X That growth Finally, We of this remarks. from and provision The And of our $XXX the the strong level in after credit in growth but our significant of up produced build and XXX% XXXX, slightly still more finally, X%

crisis Freddie and agency in market. liquidity seamlessly our HUD a and Fannie, the allowed the into that to team March active late lending transitioned and reduced much financial remain at & bonds performance. stepped QX in agency to very provided model dispersed on market and in and volumes Fed COVID-XX Dunlop spreads in, CMBS The a the work set origination needed beat the Walker As reflected skip as didn’t

QX continued will financing throughout April conditions outlook interest spreads, falling volumes in Our QX Steve and of provide the environment terrific our a those the reflect data created origination on April. and moment. for rates volumes tight by rest and

the retail, agencies assets, active hospitality and very While multifamily up capital ended. the market, to office the remain quarter for dry began in as first

And work transaction likely multifamily deal to QX, team’s our was providers, volume continue remain which The non-multifamily certain with active has insurance mostly volumes XX% while are at on low large on QX capital of dropped assets. and to transaction We all companies least provide for on assets. banks XXXX non-multifamily and financing to brokerage assets flow dramatically. debt are

several multifamily to on fundamentals. back for that The liquidity has strong So from Freddie team the of underlying activity the GSE begins financing over multifamily we for to we and property volumes expect to this and we the shutdown industry essentially pandemic market provided origination this now given being as to by the market and soon Fannie, contribute investors as come sales strength crisis next are But teams our of as long-term impacts the and HUD, expect consider abate. short acquisition quarters. looking the HUD

hosting with Our set since bankers Zoom active crisis clients on and extremely transactions. their have meetings in, brokers and working been the

markets of partners. in market mid-March, we over and are just are had clients the on we Idaho Sun and Walker clients hosting per into the people the are of These every in webcast every to we a with thought have and powerfully, year, life XXX & hold which own YouTube cancel the we live launched being clients pandemic But days clients their week. taken to on each unfortunately, leadership thousands insights Valley, providing Similar Dunlop week & time. Dunlop rather for XX,XXX their webcasts COVID-XX watched Conference bringing in Summer and brand X reaching mountains on also and businesses. Idaho the our and for unique We our to by extending Walker Walker insights that the than XXXX,

going through turn will in forward. Steve And call W&D talk results outlook to will focus first on financial Steve? back I then quarter detail. come more the I our to now to over

Steve Theobald

and results. Willy total volume everyone. Thank of XXXX provision build of today. the million, started strong the morning billion $XX quarter great earnings at you It’s XX% with from Record to with per up of top QX million. X% over transaction even a line bottom and you, good be We $XX.X was year, $XXX diluted $X.XX ‘XX total with up last at share revenues the drove same quarter and

the performance we investments additional more for Our on business first about a performance. to brief position first build our validates I will demonstrate build future have the expectations liquidity of quarter delivering provide incredible color made quarter and provision the results and capable platform. is the few and financial comments our

target comprised $XX.X is total the and or in XX% range, Return our in equity to was was Turning range above of higher personnel in been bonus, commissions would our as of expense, quarter. which X, the QX with margin percentage million of while of quarter, to revenue well within operating on percentage XX% line XX% XX% XX in and quarter, Variable compared the of points without ‘XX. a Slide personnel XXXX provision our the expense. for and compensation company totaled QX target QX was have XX% expense

of gain reflects transaction, as margins of carry basis increase This a origination rate As on we our forecast Mae. Mae range mentioned, lending significantly as points Fannie HUD portfolio the on flow less and with one Large basis locked sale than Fannie of transactions at this quarter, in XXX within percentage during margins on this of and billion quarter. in gain the came the volumes quarterly to XXX the Willy servicing are our Even $X origination our mega balance business. during XXX points. of overall a sale fees typical over our stronger with the like margin transaction lower

are servicing quarter high-margin totaling you reported As the cash the servicing strong to in year. and QX. billion We on at start of fuel backbone the of and our see this model very X, our million we million in the a EBITDA revenue These were revenues, with streams QX. contributor to $XX with to ended can strong $XX large fees portfolio adjusted pleased were continues $XX business Slide

obligations offset discussed in with quarter our at I beginning addition the booked the risk-sharing of $XX.X As of we for allowance million, the CECL call, with the adoption our the of adjustment The an impacts last implementation to losses of earnings of that assets. future COVID-XX predated adjustment crisis. deferred the the at tax our upon to of and increase allowance which that based to the CECL time, our was of equity expected forecast for for

of future losses. the losses the The allowance losses by provision taken provisions During rate million in related recorded expected increase the million a of for risk-sharing to entirely the driven peak of loan provision higher for loan slightly quarter for and the COVID-XX the forecast The estimate the the for we portfolio. impacts pandemic $X.X losses $XX.X assumes allowance expense interim great quarter, the to from allowance of on our the next our over than for of financial risk-sharing crisis. for months XX resulting the were

of short build during are what with The see is losses extended than Those period X in of peak. financial being in spike support scenario, the occurred a losses and after a As but occurred much peak X, Slide rising businesses crisis of after crisis to years government X significantly the run, experienced on unemployment crisis. slow basis consumers small the and delinquencies. you and great an delinquencies more provided points in onset of can we different today facing we the unemployment dramatic XXXX, X a years after

government Our of increase will of in economy unemployment. the assumes the impacts support forecast being the the into some pumped unprecedented mitigate help

performance higher required debt our In X.Xx enters average the much with period nearly cash due versus to of XXXX Xx addition, extended XXXX. ratio, positive service coverage of multifamily flow this with today portfolio service coverage a in crisis debt since

portfolio the assess adjust we At reserve to incremental to continues forecast making assumptions future make future a the as respect methodology, expect grow. quarters the losses with to are would reserve of continue our to will minimum, and we will upon in our increases to accordingly. CECL We our based

of address our forbearance when and million potential are end the the of now interest me on for servicing, business. $XXX had our with that our pay. service and of cash ended on $XXX liquidity in balance the of to not behalf quarter grown and balance impacts million our by the under Let we sheet. position the $XX obligated the April, We HUD principal, Mae the to terms Fannie advance fees loans does we guarantee million, By borrower their

permit The to portfolios. period insurance such programs a April We Mac have their for announced no Freddie up that for forbearance company borrowers to obligations agencies or payments between XX-day our have life Fannie COVID-XX. our license, experiencing of we the cash and if year reimbursement X of from may related for to months. are they terms Under request flow problems our after the the end DUS advances forgo

we obligation of to back level to are to been historical advance is our new, or again. This multifamily borrower issue the loan is low has the until HUD, For portfolio. an not in immaterial the FHA the but payments to begins advance delinquencies obligated assigned due making payments

had we our on context, March related million sheet For $X advances receivable to our mostly of at portfolio. XX, HUD balance

new $X.X XX loans either had at or As and April advances of balance The XX, receivable an totaling balance April, on an delinquencies we is million only relatively or shown for the of were that of Slide Fannie the X loans Mae resulting forbearance in million month $XXX.X forbearance. totaling X, delinquent comprised in $XX.X to increase increase few HUD requests $XXX,XXX. April of million

is May in will given of the high it of the the limited were increase again likely unemployment, levels April that and While request forbearance number certainly encouraging. requests June in in

cash in with anything position, the sufficient most have sizable advancing our meet our forbearance and expected liquidity situations. we obligations to draconian With

million HUD and for addition, and they loans Mae of place we the and month, principal if loan the able payments necessary. provide for Mae have in received portfolio, banks Fannie to holders. facility $XXX our which and put multifamily our by advance for expect consent use end to one also announced recently a we line In this commitment our interest place to in a advancing recently a on to be we that of forbearance, will term Ginnie Fannie from to subject credit would

liquidity stock. abundance currently we loans our our are shareholders our an advancing balance of making we now our have as financial the of the Directors quarterly coupled with current new of and to feel current confidence These to us May facilities not stopped repurchase to, position access make market in to gave moves, XX. the good interim caution, of approve and very share our strong per sheet payable the about out have Finally, $X.XX Board record on dividend, and of

some are to start the has in month by for The year, our insight Fannie, the the and $X.X we of a how already Freddie which next want financial about into second for remainder the $X.X quarters. to billion pipelines challenges quarter. a would and optimism. businesses. billion to caused quarter Turning over the great for to you into pandemic, the We’ve results lock billion are I the with to give carried $X there locked HUD robust normal rate April, reasons three year of thinking strong Despite another in expect environment agency be in business the rate

active expect capital year. and again of in remain and once sources interest lows, Fannie, historic of the countercyclical the for HUD to remainder the As with rates we at market Freddie

expect asset we muted like while the property overall capital various see classes difficult buyers by on sources comes sellers certain property lend as wait become to to crisis and what stop and front, volumes On more hospitality, and activity brokerage sales sales lending slows, the that and be next. retail debt will

loans financial still and less than the are important and our we overall fourth reached a parts in business, have but QX smaller in these to will volumes quarter. are selling our overall the sometime not until clear, on brokering lower likely While will start be impact we recover our To highs in originations agency results. be and properties, we of the margins

we year. quarters, so for are in we have strong not financial costs don’t have margins or ever can will the headcount. in while low brokerage taken believe the expectation to QX, strong increasing end still they range we end remainder with XXX future and sale lower our we any a delivering to volume variable, the been, debt points lower busier gain on With environment our XXX higher, margin of personnel and the cut of anticipate reduce for basis we in being than move salaries the on XX% company employee volume achieved With our to. the metrics. base the our high we on actions plan maintain To-date, of parts And many

be costs margins that range maintain expectation to will personnel the the year, Our year, tick of up for we operating our able low mid-XX% is for higher rate. while mid-XX% to slightly only in the into historical than revenue

growth goal in our in double-digit earnings QX we on February, earnings Finally, share call both per of XXXX. EBITDA out our and XXXX in adjusted set

remainder today, While as the have given remainder ability the the business origination the are we of position. year year, potentially here visibility solid during financial business feel liquidity cash-generating these confident the could current our the XXXX, our generating cash time about surrounding continue access the Despite that capabilities do of volume we strong during for uncertainties of and targets impact factors to not achieving the due continue to flow optimistic number succeed to we of for capital, and excuse our me. will we impacts to the this to countercyclical that our our pandemic, sit

will back over now Willy. the to turn I call

Willy Walker

of commentary reflect. The a to countercyclical Freddie mandate capital our on three of capital and of to market, little HUD, through pipeline got providing largest good you Steve. end about pick was market their Steve. multifamily piece. in very major during Steve’s our the QX very the properties, to fact Thanks, of the and as I and that dislocations. the about stream one are there, continuing step up We Glad last GSEs feel earnings to bit steady meet lending year a partners your on earlier was sources of Fannie, total on we and QX that the lending our XX% are

lending slide X have underwriting fundamentals of include year. scorecard to interest, currently market their to shows both multifamily within the we capacity tax this strong principal, and for originating to escrows plenty capital GSEs are as and and liquidity and XX for remainder continue The loans providing the very XXXX of cases, FHFA have in reserves most the months. And

addition, in the early while positive own across are data And numbers it’s similar we surrounding receiving still market In forbearance our were May, portfolio saw reassuring. the April rents. very that in May we and

at of than won’t borrowers another of which levels We the sign. promising similar rent have X the of our month, is higher same collections much a at are for translate seeing days first of full weeks, and are for hearing rental time very or pleased month, As the with our to at into and June last a over of many increased is May requests largest performance very how May the couple of are next requests should portfolio what risk however, – forbearance days. in we the XX this XX own picture point forbearance we that in month,

side these Along opportunity by end market quite on and on With to year. of lines, on new the this our of the position. Vision financial we come properties, the continue to establishing remain focused we solely X-year the crisis credit with a having well impact new other plan loans even exposure out and multifamily stronger an and originating growth positioned XXXX feel this absorb

but pandemic. frozen, invest XXXX, zag. our plan market And our has to our from did launched for in differentiating build. exceptional company IPO an the in office investments didn’t W&D and from just in in would we acquired we which Credit was last years, of thinking we we Vision But In financing and competitors. opportunities Similar focused Walker that XXXX Dallas XXXX, to XXXX. great of will were remain largest & and very months that Dunlop’s in we acquisition crisis, one closed financial we global our midst impacted growth buyer Dunlop look on build multifamily invest transformative when generate And and week, of of the Guaranteed our the history, was by as to long-term led the growth we and for the into this our in financing only hired a largest crisis, Column no others grow in XXXX, team Suisse, when long-term a our history continue just with shareholder first not be business that idea to to the we a away long returns. we’ve headed growth coming will over zigging & Walker

relationships to have That to closed doesn’t to underwriting very talents not lines, Along risk many built PNC, over past have with done non-multifamily years, & happen of why credit we we we Similarly, understand and funding so forward. that large was to partners and without transaction week, every several going two our maintain us if what for financial component our think provides the opportunities and is Dunlop, have sound today that sheet Southern transaction. nor have Management loans in it asking nurture the the even underwritten, years assets, in have made important We discipline and we while not capital. with we and all on taken market many, Dunlop it’s structured the deal over that have Walker grow I could Mae balance at haven’t parts. upon not made years & these those Walker the done recruit Fannie the transaction for reflect position and why to over last us investments were best many

throughout have last market whatsoever, We discipline are exposure hotel, office to today credit no thankful the thanks very maintaining cycle. on to loans retail or

focused gets the We fortunate believe office we it significantly to which markets, longer industry. retail sales fully will on that business and also to in be will sales volumes, recover. are hospitality, multifamily very our take previous business have likely while sales have quarters back built several investment the out to not teams so we And before

have overextend maintain ourselves discipline the past talent we bring an pay the today. we the over to new fantastic note did not around we prices I’d would enterprise finally, tight as on teams and hiring And several we years, that and

largest sheet COVID-XX, and underscored QX crisis been that has feel but volumes, by the not at continue only since accolades our record our exceptional and is of but performing financial the by see model. weather balance to very back new a coming clients. transaction market June The dispersed the transact by terms facility step We have those incredible we seamless May for up And credit have our continue wait All property quarters. team our and meet backed in an will and and and what us to when sales bring transaction to months begins and the level performance Walker an have and in make countless the maintained discipline again. a commitment We’ll and history this from company’s about to our requests, obligations. we growing made of Dunlop forbearance of working good we have loans & the we W&D originating to ability over investments business the outbreak origination into the had

Walker by during at a to and remote also on my transition close all flexibility have for during work & times. demonstrated all colleagues thank And to Dunlop exceptional like QX. communication they the congratulating truly teamwork, the challenging them these I’d the

in I’ve leading this colors. be never I been all As W&D I Friday, last said and prouder sent to employees wearing video the company a

for thank of our as the company us our has that as joined this each like We demonstrated team. everyone I’d day. have people today a and built shareholders is brand well to and their been that trust and who an also with call has reflective W&D culture and capabilities, and in confidence incredible on incredible every

over COVID-XX with wish Finally, and months the like and the we everyone their I’d families’ of the crisis. health health economic coming to impact and as to deal the safety continue

over the to open questions. for I will call line to now turn back the Kelsey

Kelsey Duffey

[Operator Instructions] first at question is from KBW. Jade Rahmani Our coming

Jade Rahmani

done this much. and team, to bringing during Thank commend Willy Nice key management the and have webinars job very demonstrating I also issues you, to you, all well. outstanding to period. think you I’ve want to for and the listening hope strong hosted I including safe you’ve been from an life. hear you’re leadership

adequacy there relative cash. servicing with to what position potential increase of starting look operations drove measure And you future liquidity to credit the I costs? liquidity, are Just metrics the cost in wanted if investors to sequential the current suggest any and at, ongoing advances, ask of

Steve Theobald

wants cash, and I Willy Jade, will far as as there to start in. in, things. of in But is can jump a the if he follow growth couple

been have than are that self-fund loans management we’ve tool. borrowing as sheet. to short-term rather cash a of doing balance lines the using agency for while maintain a stopped the that just the held cash for sale our on cash kind to on warehouse We So just

a on then cash they as itself we’ve actually originating business. positive as new And a they’re loans sheet. have or most that. In I so collecting we amass stopping been mature down, capital, addition, mentioned, as we as importantly, stopped And flow well. loans just finally, us and our declined paying that’s helped balance then the cash portfolio so amount Those of use fair as that has

the So as the escrows, cash interest and the the a we’re monthly collecting that that’s our servicing warehouse income all to and we’re making basis. fees off on balance adding

Jade Rahmani

is to own reasonable months X expect utilization cash W&D’s terms magnitude such say the you fund of advances, to in of terms X advances And what say, would to in next months? servicing over,

Steve Theobald

pin a Yes. It’s number, really hard to down specific Jade.

act I having us. if positive sign board support in initial relatively will the Fannie would to need imagine, based line from benign I scenarios, as fair forbearance some say and be results cash dramatic think also on we’re encouraging pretty comfortable And for is the feel But concerned. And policy on it’s advance in our to of there would the the insurance variety of through a you some, place borrowers, of as getting the run arises. it the the as overly terms think we’re a P&I very that requests. not and we we’ve some increases

Willy Walker

collections or – as feel also in, say, yesterday percentage first say one jump all of portfolio through would And we May, Jade, I’d clients run days every it. beat out heck that, first up if Yes. – would the and April first his days team for mentioned all, you have pay I and strong. collections board Steve talked I that scenarios I been just of that comments, well well to as of our the out lines. the And the April sit points. balance comfortable the of a as very at their withstand – across I’ve uptick say X to for very major XX and in where of dramatic be over X we along of significantly them line one and those X given we’ll cash a that the today sheet April by have on units, May, the able commitment XX,XXX I talking – through my were the extremely to was ahead extensive

so forbearance we’re the right as clients a either that – facility relates good the portfolio, use of we large on the in feeling quite to not our majority the of for. asking cash sheet our balance and having now, for it or – most And to not have commitment

Jade Rahmani

Thanks very much.

headwinds. your asset curtail perhaps, then credit, multifamily What back insights had last from sectors would on But been outlook outlook? in defensive the apartment cycle, to some you’ve potential spilled In of terms for credit excess multifamily homeownership into clients class. garnered historically, your vantage rental point expectation the from credit it’s the we the a be that and

Willy Walker

were of I question homes very as single-family Yes, will tenants have because to single-family severe moving into homes has been virus. move multifamily very starts couldn’t pre-crisis, housing today, of they’re say that’s certainly you lack it want entry-level, many know economy post-crisis. the a housing not the down. that the home move into be And single-family as know is clearly, they sort the of asked you relates shut an because and if single-family well, halted going I as to underway there interesting Jade, would into a one, immediately that to of

to going So singles, into as demand more drive many moving going people that I multifamily. that for relates post-crisis. in and that Clearly some the at off-campus are housing side, will overall the from they and would drive actually I get it occupancy taking for increased single-unit turning healthy that put universities to will them levels, into need student would you forward. think doubles and is instances, singles, on remain student housing looking very actually And might forth doubles

May, creditworthiness The oversupply other you relates at it This single-family large single it their as practices know, management of was is, to And a as X say thing they there the actually month, move portfolio and were best well some on yesterday. through the the XX% received of asset paid rental X% there those portfolio actually month in class. team, huge the team from renewals that a to time, very to time management I management isn’t. their the overall were did that rent with And just family. days I over of and around, the and SFR was a on of their taking of contracts SFR portfolio. to on they’ve their turning. take would Last SFR speak they’re their It portfolio. bumps client working multifamily multifamily

how defensive know People need very having how don’t deep now relates to obviously a to we economic or only multifamily asset while speaking, the and on remain point, somewhere, has impact crisis generally been to just credit goes we and class. say, as exposure assets. live be, deep feel it right the would multi your will good will I So

Jade Rahmani

for questions. much taking very you the Thank

Willy Walker

Thanks, Jade.

Kelsey Duffey

you. Thank

Our Henry Wedbush next question at comes from Securities. Coffey

Henry Coffey

call. Yes. for organizing this everyone morning, Good you and thank

You made housing. comment student – brought on a you up

care sectors? obviously, student extended an homes they’re where assets those and and your But of two – as so what observation. how nursing thoughts about And look But homes perform? assume the portfolio. portfolio, you would the in are housing your that’s I are the portion and through interesting at-risk

Willy Walker

first let I’ll I like a in after comment. he’d quick jump So if make Steve

online student courses year. in about months Those side, portfolio. at-risk is been are as their to our XXXX, XXXX those exposure And have Henry, last units. we going have universities from rate students actually tell. their to of billion and into very as too pay exceptional, $X.X as it’s living to total on to as class. in the student are housing student is housing the asset going And housing On the Many far well up the on a or – off-campus assets, has fall finish exceedingly in X still deposits fall. over here, people the big our not, But performing clearly, a on time at academic taking has where period those communicate start is back-to-school there impact that heading been what their early

one is Purdue, As the intend President as to housing universities, for of obviously, on-campus put you housing. in fall. circulation, on-campus when will side outbreak drives of on-campus quarantine are Purdue if the back-to-school said and the an to off-campus if a see going additional back universities the to much out. like fall fall. and take that binary you plays been probably in out is footnote to of and know, in that But area, that very, demand takes a get or they are they that they going student obviously it have dorm, That student the inventory of of how foot in have some the the it that either front something somewhat they’re Kids will, not, get and of on then saying is that we event. to very One that virus

it predominantly to portfolio is loans. seniors our don’t we As have – relates seniors, HUD

do not credit many And for forbearance, those take ask loans. while on will of those loans invariably risk so we

not the assisted an said, housing Henry, Fannie some you facilities population, than general they this at people, it’s and the that elderly virus fundamentals sending equipment, the have there have because active a if the I the then the seniors for seniors many skilled What so of now moved a do given they think I out the that many, to the in in into be into as we is And haven’t virus particularly have facility And to actually our seeing of take outbreak. well, is are portfolios. as in much I’m only that seniors the care that time, care as deeming crisis But at-risk. housing people the people project side place mom in or the people living we’ve portfolio. seen dad the other to and the in now nursing that or safer we most have lender and assisted development and will, that think crisis to are we’ve degradation or into seen, that, heading we’re the living training space, we many Mae

not want also And so that by the a of for board, staying little hospitals starting inflows that’s are – see in. to time. are coming fact actually it’s their extended beds we starting And in across bit we bolstered seniors don’t but see the actually to periods

they’re not so condition to And then to someone of seniors and home, a the hospital, the goes they’re when has facility. moving a hospital with into going move housing out

pulling making the for that, then So of help you around with environments deal seniors how if the more inflows away you might first that, I space. reaction or to if think actually the and seniors, and realizing of and fortified maturation will, in turn will, virus enrollment, then housing

Steve Theobald

Yes. of relatively the $XXX just and to margins. that, exposure Fannie about terms our got Mae portfolio, so our And million scale to to modest we’ve of seniors, sheet between on add Henry, in on-balance

Henry Coffey

they like do they loans? they’re... stop paying, buy one or two they – function you Ginnie Mae when advance? loan, stop do questions Two is with your HUD paying, the When I more around know normal you questions, loans,

Steve Theobald

defaulted of one its to they that pool. We warehouse The Ginnie actually, Mae the we minimizing When advancing have is while do ability to lines of paying, able gives us out cash. Henry. yes, do answer agency advance. stop the to our loan purchase a be And

do available to that the on So have option multifamily us we side.

Henry Coffey

What the going lots of have, my with the pretty about questions, loans, taste the what Calabria it just they housing when advances. tone of not are way risk, general lots servicer multifamily? is a other at fairly Fannie stepping Just really ended a showing – the comes stand? government what’s residential in an it particularly taking to the a Are around of of to penalties the plate, There’s last is GSEs question? their market open one. lot is of – they craziness of How rigid tone on kind is question or up the the flexibility, for in parties

Willy Walker

Henry, the the on – you’ve multi seen, single-family the all, of forbearance side on than numbers multifamily as they first are dramatically are So higher side.

about somebody side you unemployed and people number where forbearance. to going to of the they might a side, event also on that’s going is property numbers file for not given their file but unemployment if unemployed, is will multifamily the is If think a for insurance, the have the, performance in you of multifamily of singular likely a benefit in In you will, to sense the that force economic that property the it, who the single-family overall be forbearance. cause

payments, piece $XXX $X,XXX total that actually as on above it which But unemployment of who making are to pre-crisis. making in per obviously, many brings are $XXX you instances, unemployment the basis is, week CARES relates know, second has boost payout. The the to many as in a Act a today are people unemployment were week, what them state-by-state instances, to they many insurance to which benefits on

who CARES unemployment the And pay people benefits receiving – under those are for to so insurance Act. is there money there rents unemployment

of up to X would say in of the went of where request. But say about now of very that balance that anything FHA else kind we in to – basically markets one it’s an we I cash this, us saw to said have and on weeks provide a – as the when sheet. U.S. remarks, FHFA’s of private have commitment, estimation on facility we’ll our we FHFA ago, any place. As advances more happy just forbearance the because that to and we and be it set to will going to we weren’t And move our that. Freddie current relates Fannie, Fannie commitment capital banks financing fund policy the And the bondholders, we’re get right financing. insurance And than of major immediately from to pivoted that have because of to for amount Steve his and with

financial order. only performance, step the wasn’t So to have the put that very not I immediately we thankfully, together relationships the we say headed saw FHFA that would pivoted. in sheet and balance we something to was and where going that short And the like once also just in, Fed

Henry Coffey

you Great. very Thank much.

Kelsey Duffey

Delaney Our Steve JMP. will next of come from question

Steve Delaney

you Good morning. Can hear me?

Willy Walker

We can.

Steve Delaney

to you COVID? those impacted looking that, see love months to to extended pretty another with great could any appears it’s the to support by and support sort forbearance, willing well. just that see of COVID. start and the see X needs I’m you I’d to so you and rent both if The Well, the the do do do that unemployed risk continue much Congress months, like approach, that by forbearance. wondering Congress X Alright. it period original webcast to be impacted anything those of

Willy Walker

talking Steve, about or you eviction mortgage asking you are about prohibition? forbearance, the are

Steve Delaney

part, that well, Eviction, yes. on

Willy Walker

the here’s deal. So

ends. paying As far, May we saw landlord, stop in April kind got live The be is and their thing and of rent anyone somewhere. as so last we to in whenever their pay saw eviction in any their wants disagreement that moratorium to rent. with people the They

rent. or not it’s whether receiving out making live, you employed curb they’re sitting might and the versus an still paying Having in-restaurant at the going case be and not a rent the kicked just tips still level be, not because now paying around are aren’t model, people model tomorrow. benefits or are and diminished people So currently were you on carryout but their government, unemployed whatever the because a to from you federal whether to are somewhere shelter

very feel that. about we good So

lot been on as think pay. so and the of as eviction that don’t propensity significant the there, moratorium, people impact it’s it much having a a is because got hasn’t first out And at something market I it to people’s on concerned

right in very to from mind a the per CARES unemployment That’s payment week Act post-July. $XXX supplemental think question place underneath benefits needs the stay the is government. important bigger our the the component Steve, I and that federal now, in

given so relates it as far don’t we’ve think, were So to that’s what moratorium, if seen the big renters’ a behavior, they extend to issue. eviction I

be Act. out we in there to I’m I aren’t that that the end work to get or comfortable employment either making a it component significant it. in up July, to when seen therapeutics to more part pay that’s a to of there are would to feel people haven’t at end not we country, resurgence get of But issue to think what that very is so look if continue big rent. and their back able won’t super extending people, hard-pressed important that they the think being think, the component they they I a CARES

Steve Delaney

the terms that you Is sheet, capacity in to force, W&D, at as balance any MSR Thank market in M&A-like to if and for servicers, That’s opportunities origination you opportunity that me market? GSE-approved look be And problems have helpful, servicer opportunity. curious possibly it there’s have envision the the another could you one any the you. liquidity it from of opportunities all Just sales advances? as Willy. your that with possible smaller current might space, possibly for residential for And your seems be to transfers you side. having obviously don’t servicing opposed of the need there the to services servicing that could smaller have

Willy Walker

Yes.

I opportunities will So present think themselves.

fast their and years, charge Walker hired can a interesting as mean, very know, are that’s when we’ve those sort Freddie know, competitors of showing in zigging said, our you my last sources a & major than zag. from I for of have of as pretty are all a for and As And people those Dunlop you crisis. the it HUD also future years fast as largest we market. how of are and – fact & X as capital, and countercyclical. because capital, for they’ve at our taken potential I’d and that the we look that’s – the or I others grow closed we lot are QX you and is all Walker Steve, depth the history having government in say, platform, transaction of the have, losses, in and performance oh, this team mentioned grown financial faster our in that got significant also Fannie, of the week Dunlop’s one biggest we comments, competitors, midst of Those –

to in and best to the put that you sudden, a of bought when you Credit I We financial right head, Walker to it probably & to as all turned our sitting and And "defensive deal as think fantastic we that want there a we’re capital". position that Now out investors a Column on relates out would took fantastic deal access its are that find was from Column But They model would that to the relates in And very a for be It our Suisse, transaction. Suisse a market us. turned sure of we closely. XXXX flow acquired stock may we it cashless be the to now opportunities, piece for look, be and cash crisis. depths very as to W&D to Credit make in it in the business Dunlop. attractive watching recall, positioning.

and not the So it may ability make record go to have do and or the markets to cash track we also deals require access to of that happen. use the may us or a debt lot out

to several over and watching there and grow. we’re to next opportunities us be that quarters the So will I’m continue years, assuming for

Steve Delaney

it, back shut and in RMBS private of effective, the the that sector private transaction. starting not this And at is I we’re become or their decision picked like down. any And and not terms they’re in included and to ran the in cancel had they’re with the years for signs for happen that just securitization. rental. GSEs with Needless it But the not programs included seeing It to couple much origination program made CMBS say clear. pretty to completely because not ago, up a is of going final is vengeance a A It’s think with comment. single-family to that looks with [indiscernible]. me a come private well-established pilot really time question AAAs,

my the would into for final going would a approach? of That’s private interest curious reconsider? something thanks toolkit you your programs more be program, how mandate need under question single-family forward? the would from they heard of affordability rental that a that And GSEs, your area have you that comments. sector you Just or any might fit chatter possibly Do GSE

Willy Walker

Sure, Steve.

Freddie and the in a Fannie we to interest space, were first first player be being significant put into optical Mac financing the Freddie major had FSR one and the when of space. in lenders So program that entered we

you know, shut well As FHFA. by that down got

the ago market to Henry’s to CMBS from SFR back, moment get that through they as and forth this as they’re if any innovative of to relates to since collected no relates during a we statement, that CMBS. your do and that a the new had have Fannie put period would FHFA And that it allow Starwood, I by performance of XX% comment is will to DiModica their to made at capital liquidity May would holding way maintain of know, one I’d sort it Freddie wrong crisis, way pretty question, as and in come find from stay SFR but the Dr. of what call market this of have indicative you that proven hope seen broader in portfolios, there. say, also days type actually Calabria private be I anything I very comment I everything a and onset much am Jeff our during out X the Steve, or of because expectations said, Given seeing good that a fairway start some to coming love covered listened comment is attitude the you they time. liquidity. clients made to the in from and market,

sort you amount put Calabria sit advances, would ignored, not also about the So, out is far, you capital heard how put come so while Dr. even this would data side that the across one on of that market, know have and single-family heard if get has the servicer crisis-we-need there I has a and that, obviously particularly – FHFA either say, that point let’s I that if and think Fannie I of noise of that, would haven’t then completely to and Freddie space. loud forth the I into don’t before

Steve Delaney

Thank the you comments. for

Kelsey Duffey

additional We no have questions.

closing floor to the turn Willy remarks. will back I for So over

Willy Walker

Great.

thinking the all Steve me able who use you time, and get took joined get about us quite and I thank Zoom and live. for audio. everyone call quarterly you of doing a to some just giving off via our actually us the pandemic today. to were our it First this and We’ve global for Zoom see to earnings of to participate hope been remarks

power real second was hopes thing families thanks of an during times. safety is and the the great And would of one is we teamwork final in able W&D success over feel challenging the The several that that’s thanks showed given for have now, the I Thanks, and investments positioned health right And of we to incredible build a the the our team. reiterate well will be in the all We going and Kelsey. QX very been to years. markets. soon. all the everyone’s past and a for and touch wishes on Have day, everything. everything these

Steve Theobald

Thanks, everyone.

Walker & Dunlop (WD) 11 May 202020 Q1 Earnings call transcript