10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission File Number: 001-35000

Walker & Dunlop, Inc.

(Exact name of registrant as specified in its charter)

Maryland	80-0629925
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

7272 Wisconsin Avenue, Suite 1300

Bethesda, Maryland 20814

(301) 215-5500

(Address of principal executive offices and registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	WD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒  ​ Smaller Reporting Company ☐ Accelerated Filer ☐ ​ Emerging Growth Company ☐ Non-accelerated Filer ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 28, 2022, there were 33,030,266 total shares of common stock outstanding.

Walker & Dunlop, Inc.
Form 10-Q
INDEX

		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	67
PART II	OTHER INFORMATION	67
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	69
	Signatures	70

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

		June 30, 2022	December 31, 2021
Assets
Cash and cash equivalents	$	151,252	$	305,635
Restricted cash		34,361		42,812
Pledged securities, at fair value		149,560		148,996
Loans held for sale, at fair value		931,516		1,811,586
Loans held for investment, net		247,243		269,125
Mortgage servicing rights		978,745		953,845
Goodwill		937,881		698,635
Other intangible assets		207,024		183,904
Derivative assets		59,810		37,364
Receivables, net		236,786		212,019
Committed investments in tax credit equity		187,393		177,322
Other assets		413,201		364,746
Total assets	$	4,534,772	$	5,205,989
Liabilities
Warehouse notes payable	$	1,125,677	$	1,941,572
Notes payable		719,210		740,174
Allowance for risk-sharing obligations		48,475		62,636
Derivative liabilities		17,176		6,403
Commitments to fund investments in tax credit equity		173,740		162,747
Other liabilities		784,719		714,250
Total liabilities	$	2,868,997	$	3,627,782
Stockholders' Equity
Preferred stock (authorized 50,000 shares; none issued)	$	—	$	—
Common stock ($0.01 par value; authorized 200,000 shares; issued and outstanding 32,322 shares at June 30, 2022 and 32,049 shares at December 31, 2021)		323		320
Additional paid-in capital ("APIC")		403,668		393,022
Accumulated other comprehensive income ("AOCI")		(222)		2,558
Retained earnings		1,229,712		1,154,252
Total stockholders’ equity	$	1,633,481	$	1,550,152
Noncontrolling interests		32,294		28,055
Total equity	$	1,665,775	$	1,578,207
Commitments and contingencies (NOTES 2 and 9)		—		—
Total liabilities and equity	$	4,534,772	$	5,205,989

See accompanying notes to condensed consolidated financial statements.

3

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except per share data)

(Unaudited)

	For the three months ended				For the six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues
Loan origination and debt brokerage fees, net	$	102,605	$	107,472	$	184,915		183,351
Fair value of expected net cash flows from servicing, net		51,949		61,849		104,679		119,784
Servicing fees		74,260		69,052		146,941		135,030
Property sales broker fees		46,386		22,454		69,784		31,496
Investment management fees		10,282		3,815		22,930		6,551
Net warehouse interest income		5,268		4,630		10,041		9,185
Escrow earnings and other interest income		6,751		1,823		8,554		3,940
Other revenues		43,347		10,316		112,448		16,362
Total revenues	$	340,848	$	281,411	$	660,292	$	505,699
Expenses
Personnel	$	168,368	$	141,421	$	312,549		237,636
Amortization and depreciation		61,103		48,510		117,255		95,381
Provision (benefit) for credit losses		(4,840)		(4,326)		(14,338)		(15,646)
Interest expense on corporate debt		6,412		1,760		12,817		3,525
Other operating expenses		36,195		19,748		68,409		37,335
Total expenses	$	267,238	$	207,113	$	496,692	$	358,231
Income from operations	$	73,610	$	74,298	$	163,600	$	147,468
Income tax expense		19,503		18,240		38,963		33,358
Net income before noncontrolling interests	$	54,107	$	56,058	$	124,637	$	114,110
Less: net income (loss) from noncontrolling interests		(179)		—		(858)		—
Walker & Dunlop net income	$	54,286	$	56,058	$	125,495	$	114,110
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes		(1,810)		768		(2,780)		610
Walker & Dunlop comprehensive income	$	52,476	$	56,826	$	122,715	$	114,720
Basic earnings per share (NOTE 10)	$	1.63	$	1.75	$	3.77	$	3.57
Diluted earnings per share (NOTE 10)	$	1.61	$	1.73	$	3.73	$	3.52
Basic weighted-average shares outstanding		32,388		31,019		32,304		30,922
Diluted weighted-average shares outstanding		32,694		31,370		32,657		31,322

See accompanying notes to condensed consolidated financial statements.

4

Walker & Dunlop, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(In thousands, except per share data)

(Unaudited)

	For the three and six months ended June 30, 2022
		Stockholders' Equity
	Common Stock							Retained		Noncontrolling		Total
	Shares	Amount		APIC		AOCI		Earnings		Interests		Equity
Balance at December 31, 2021	32,049	$	320	$	393,022	$	2,558	$	1,154,252	$	28,055	$	1,578,207
Walker & Dunlop net income	—		—		—		—		71,209		—		71,209
Net income (loss) from noncontrolling interests	—		—		—		—		—		(679)		(679)
Other comprehensive income (loss), net of tax	—		—		—		(970)		—		—		(970)
Stock-based compensation - equity classified	—		—		10,812		—		—		—		10,812
Issuance of common stock in connection with equity compensation plans	544		5		15,526		—		—		—		15,531
Repurchase and retirement of common stock	(195)		(1)		(27,048)		—		—		—		(27,049)
Cash dividends paid ($0.60 per common share)	—		—		—		—		(20,077)		—		(20,077)
Other activity (NOTE 10)	—		—		(5,303)		—		—		15,490		10,187
Balance at March 31, 2022	32,398	$	324	$	387,009	$	1,588	$	1,205,384	$	42,866	$	1,637,171
Walker & Dunlop net income	—		—		—		—		54,286		—		54,286
Net income (loss) from noncontrolling interests	—		—		—		—		—		(179)		(179)
Other comprehensive income (loss), net of tax	—		—		—		(1,810)		—		—		(1,810)
Stock-based compensation - equity classified	—		—		9,980		—		—		—		9,980
Issuance of common stock in connection with equity compensation plans	43		—		110		—		—		—		110
Repurchase and retirement of common stock	(119)		(1)		(2,409)		—		(9,892)		—		(12,302)
Distributions to noncontrolling interest holders	—		—		—		—		—		(1,675)		(1,675)
Cash dividends paid ($0.60 per common share)	—		—		—		—		(20,066)		—		(20,066)
Other activity (NOTE 10)	—		—		8,978		—		—		(8,718)		260
Balance at June 30, 2022	32,322	$	323	$	403,668	$	(222)	$	1,229,712	$	32,294	$	1,665,775

	For the three and six months ended June 30, 2021
		Stockholders' Equity
	Common Stock							Retained		Total
	Shares	Amount		APIC		AOCI		Earnings		Equity
Balance at December 31, 2020	30,678	$	307	$	241,004	$	1,968	$	952,943	$	1,196,222
Walker & Dunlop net income	—		—		—		—		58,052		58,052
Other comprehensive income (loss), net of tax	—		—		—		(158)		—		(158)
Stock-based compensation - equity classified	—		—		7,836		—		—		7,836
Issuance of common stock in connection with equity compensation plans	430		4		12,602		—		—		12,606
Repurchase and retirement of common stock	(131)		(1)		(13,373)		—		—		(13,374)
Cash dividends paid ($0.50 per common share)	—		—		—		—		(16,052)		(16,052)
Balance at March 31, 2021	30,977	$	310	$	248,069	$	1,810	$	994,943	$	1,245,132
Walker & Dunlop net income	—		—		—		—		56,058		56,058
Other comprehensive income (loss), net of tax	—		—		—		768		—		768
Stock-based compensation - equity classified	—		—		7,892		—		—		7,892
Issuance of common stock in connection with equity compensation plans	64		1		530		—		—		531
Repurchase and retirement of common stock	(7)		(1)		(815)		—		—		(816)
Cash dividends paid ($0.50 per common share)	—		—		—		—		(16,070)		(16,070)
Balance at June 30, 2021	31,034	$	310	$	255,676	$	2,578	$	1,034,931	$	1,293,495

See accompanying notes to condensed consolidated financial statements.

5

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	For the six months ended June 30,
	2022		2021
Cash flows from operating activities
Net income before noncontrolling interests	$	124,637	$	114,110
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gains attributable to the fair value of future servicing rights, net of guaranty obligation		(104,679)		(119,784)
Change in the fair value of premiums and origination fees		7,852		9,047
Amortization and depreciation		117,255		95,381
Provision (benefit) for credit losses		(14,338)		(15,646)
Gain from revaluation of previously held equity-method investment		(39,641)		—
Originations of loans held for sale		(8,805,659)		(7,293,128)
Proceeds from transfers of loans held for sale		9,637,859		8,024,903
Other operating activities, net		(69,417)		(55,541)
Net cash provided by (used in) operating activities	$	853,869	$	759,342
Cash flows from investing activities
Capital expenditures	$	(11,902)	$	(3,800)
Purchases of equity-method investments		(12,029)		(3,248)
Purchases of pledged available-for-sale ("AFS") securities		(46,395)		(2,000)
Proceeds from prepayment and sale of pledged AFS securities		6,101		22,092
Investments in joint ventures		(5,040)		(38,805)
Distributions from joint ventures		11,359		22,113
Acquisitions, net of cash received		(78,465)		(10,507)
Originations of loans held for investment		(49,057)		(116,087)
Principal collected on loans held for investment		71,500		205,653
Net cash provided by (used in) investing activities	$	(113,928)	$	75,411
Cash flows from financing activities
Borrowings (repayments) of warehouse notes payable, net	$	(826,454)	$	(744,281)
Borrowings of interim warehouse notes payable		36,459		84,766
Repayments of interim warehouse notes payable		(26,000)		(34,174)
Repayments of notes payable		(21,244)		(1,490)
Repayment of secured borrowings		—		(73,312)
Proceeds from issuance of common stock		263		13,137
Repurchase of common stock		(39,380)		(14,190)
Cash dividends paid		(40,143)		(32,122)
Payment of contingent consideration		(17,612)		—
Distributions to noncontrolling interest		(1,675)		—
Debt issuance costs		(1,573)		(1,333)
Net cash provided by (used in) financing activities	$	(937,359)	$	(802,999)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2)	$	(197,418)	$	31,754
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period		393,180		358,002
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	195,762	$	389,756
Supplemental Disclosure of Cash Flow Information:
Cash paid to third parties for interest	$	28,023	$	16,708
Cash paid for income taxes		45,300		26,723

6

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (CONTINUED)

(In thousands)

(Unaudited)

	For the six months ended June 30,
	2022		2021
Supplemental Disclosure of Non-Cash Activity:
Issuance of common stock to settle compensation liabilities	$	6,551	$	9,589
Issuance of common stock to settle contingent consideration liabilities (NOTE 7)		8,750		—
Net increase (decrease) in total equity due to consolidations of tax credit entities (NOTE 10)		10,447		—
Net increase (decrease) in total assets due to consolidations of tax credit entities (NOTE 10)		13,700		—
Net increase (decrease) in total liabilities due to consolidations of tax credit entities (NOTE 10)		3,559		—
Forgiveness of a receivable the Company had with an acquired joint venture (NOTE 7)		5,460		—
Additions of contingent consideration liabilities from acquisitions (NOTE 7)		117,000		7,504
Increase in Goodwill (NOTE 7)		29,695		—

See accompanying notes to condensed consolidated financial statements.

7

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

These financial statements represent the condensed consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. The statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they may not include certain financial statement disclosures and other information required for annual financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results for the Company in the interim periods presented have been included. Results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or thereafter.

Walker & Dunlop, Inc. is a holding company and conducts the majority of its operations through Walker & Dunlop, LLC, the operating company. Walker & Dunlop is one of the leading commercial real estate services and finance companies in the United States. The Company originates, sells, and services a range of commercial real estate debt and equity financing products, provides multifamily property sales brokerage and valuation services, engages in commercial real estate investment management activities with a particular focus on the affordable housing sector through low-income housing tax credit (“LIHTC”) syndication, provides housing market research, and delivers real estate-related investment banking and advisory services.

Through its agency lending products, the Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac” and, together with Fannie Mae, the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). Through its debt brokerage products, the Company brokers, and in some cases services, loans for various life insurance companies, commercial banks, commercial mortgage-backed securities issuers, and other institutional investors.    

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation—The condensed consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly-owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting.

If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but holds a controlling financial interest and is the primary beneficiary or owns a majority of the voting interests, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Condensed Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Condensed Consolidated Statements of Income.

Subsequent Events—The Company has evaluated the effects of all events that have occurred subsequent to June 30, 2022. The Company has made certain disclosures in the notes to the condensed consolidated financial statements of events that have occurred subsequent to June 30, 2022. There have been no other material subsequent events that would require recognition in the condensed consolidated financial statements.

Use of Estimates—The preparation of condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, including the allowance for risk-sharing obligations, initial fair value of capitalized mortgage servicing

8

rights, asset management fee receivable related to LIHTC funds, derivative instruments, estimation of contingent consideration for business combinations, estimation of the fair value of the Apprise joint venture (as discussed in NOTE 7), and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates.

Co-broker Fees—Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income, were $4.4 million and $3.6 million for the three months ended June 30, 2022 and 2021, respectively and $10.3 million and $8.9 million for the six months ended June 30, 2022 and 2021, respectively.

Loans Held for Investment, net—Loans held for investment are multifamily interim loans originated by the Company for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing (“Interim Loan Program”). These loans have terms of up to three years and are all adjustable-rate, interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses.

As of June 30, 2022, Loans held for investment, net consisted of nine loans with an aggregate $252.1 million of unpaid principal balance less $0.9 million of net unamortized deferred fees and costs and $4.0 million of allowance for loan losses. As of December 31, 2021, Loans held for investment, net consisted of 12 loans with an aggregate $274.5 million of unpaid principal balance less $1.2 million of net unamortized deferred fees and costs and $4.2 million of allowance for loan losses.

The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the Current Expected Credit Losses (“CECL”) standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year.

The loss rate for the forecast period was 11 basis points and 15 basis points as of June 30, 2022 and December 31, 2021, respectively. The loss rate for the remaining period until maturity was six basis points and nine basis points as of June 30, 2022 and December 31, 2021, respectively.

One loan held for investment with an unpaid principal balance of $14.7 million was delinquent and on non-accrual status as of June 30, 2022 and December 31, 2021. The Company had $3.7 million in collateral-based reserves for this loan as of both June 30, 2022 and December 31, 2021 and has not recorded any interest related to this loan since it went on non-accrual status in 2019. All other loans were current as of June 30, 2022 and December 31, 2021. The amortized cost basis of loans that were current as of June 30, 2022 and December 31, 2021 was $236.3 million and $258.6 million, respectively. As of June 30, 2022, $48.6 million, $160.5 million, and $28.3 million of the loans that were current were originated in 2022, 2021, and 2019, respectively. Other than the defaulted loan noted above, the Company has not experienced any delinquencies related to loans held for investment.

Provision (Benefit) for Credit Losses—The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Condensed Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the three and six months ended June 30, 2022 and 2021:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Provision (Benefit) for Credit Losses (in thousands)	2022		2021		2022		2021
Provision (benefit) for loan losses	$	(71)	$	(75)	$	(177)	$	(662)
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Provision (benefit) for credit losses	$	(4,840)	$	(4,326)	$	(14,338)	$	(15,646)

9

Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also occasionally fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. The Company had a portfolio of participating interests in loans held for investment that was accounted for as a secured borrowing and paid off at the end of the second quarter of 2021. The Company recognized Net warehouse interest income on the unpaid principal balance of the loans and secured borrowing for the three and six months ended June 30, 2021. Included in Net warehouse interest income for the three and six months ended June 30, 2022 and 2021 are the following components:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Net Warehouse Interest Income (in thousands)	2022		2021		2022		2021
Warehouse interest income - loans held for sale	$	12,175	$	7,863	$	21,038	$	16,981
Warehouse interest expense - loans held for sale		(8,468)		(4,979)		(13,801)		(11,638)
Net warehouse interest income - loans held for sale	$	3,707	$	2,884	$	7,237	$	5,343
Warehouse interest income - loans held for investment	$	3,015	$	2,962	$	5,365	$	6,190
Warehouse interest expense - loans held for investment		(1,454)		(1,216)		(2,561)		(2,348)
Warehouse interest income - secured borrowings		—		883		—		1,748
Warehouse interest expense - secured borrowings		—		(883)		—		(1,748)
Net warehouse interest income - loans held for investment	$	1,561	$	1,746	$	2,804	$	3,842
Total net warehouse interest income	$	5,268	$	4,630	$	10,041	$	9,185

        Statement of Cash Flows—For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of June 30, 2022 and 2021 and December 31, 2021 and 2020.

	June 30,				December 31,
(in thousands)	2022		2021		2021		2020
Cash and cash equivalents	$	151,252	$	326,518	$	305,635	$	321,097
Restricted cash		34,361		15,842		42,812		19,432
Pledged cash and cash equivalents (NOTE 9)		10,149		47,396		44,733		17,473
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	195,762	$	389,756	$	393,180	$	358,002

        Income Taxes—The Company records the realizable excess tax benefits from stock-based compensation as a reduction to income tax expense. The realizable excess tax benefits were $0.3 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively, and $5.2 million for each of the six months ended June 30, 2022 and 2021.

Contracts with Customers—A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. The majority of the Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the majority all of the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and six months ended June 30, 2022 and 2021:  

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	For the three months ended				For the six months ended
	June 30,				June 30,
Description (in thousands)	2022		2021		2022		2021		Statement of income line item
Certain loan origination fees	$	53,281	$	43,222	$	90,646	$	67,123	Loan origination and debt brokerage fees, net
Property sales broker fees		46,386		22,454		69,784		31,496	Property sales broker fees
Investment management fees		10,282		3,815		22,930		6,551	Investment management fees
Application fees, subscription revenues, other revenues from LIHTC operations, and other revenues		35,198		4,113		50,855		7,627	Other revenues
Total revenues derived from contracts with customers	$	145,147	$	73,604	$	234,215	$	112,797

Litigation—In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition.

Recently Adopted and Recently Announced Accounting Pronouncements—There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2021 Form 10-K. There are no recently announced but not yet effective accounting pronouncements that are expected to have a material impact to the Company as of June 30, 2022.

Reclassifications—The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year    presentation.

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of the mortgage servicing rights (“MSRs”) was $1.3 billion as of both June 30, 2022 and December 31, 2021. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. For example, see the following sensitivities related to the discount rate:

The impact of a 100-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $40.6 million to the MSRs outstanding as of June 30, 2022.

The impact of a 200-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $78.6 million to the MSRs outstanding as of June 30, 2022.

These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets.

Activity related to MSRs for the three and six months ended June 30, 2022 and 2021 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of MSRs (in thousands)	2022		2021		2022		2021
Beginning balance	$	976,554	$	909,884	$	953,845	$	862,813
Additions, following the sale of loan		60,445		57,300		137,299		153,940
Amortization		(47,098)		(43,914)		(93,455)		(86,466)
Pre-payments and write-offs		(11,156)		(7,751)		(18,944)		(14,768)
Ending balance	$	978,745	$	915,519	$	978,745	$	915,519

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The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of June 30, 2022 and December 31, 2021:

Components of MSRs (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	1,617,975	$	1,548,870
Accumulated amortization		(639,230)		(595,025)
Net carrying value	$	978,745	$	953,845

The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of June 30, 2022 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	92,455
Year Ending December 31,
2023	$	177,502
2024		159,556
2025		136,593
2026		115,353
2027		97,384
Thereafter		199,902
Total	$	978,745

NOTE 4—ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION

When a loan is sold under the Fannie Mae DUS program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. The guaranty is in force while the loan is outstanding. The Company does not provide a guaranty for any other loan product it sells or brokers. Substantially all loans sold under the Fannie Mae DUS program contain partial or full-risk sharing guaranties that are based on the credit performance of the loan. The Company records an estimate of the loss reserve for CECL for all loans in its Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Condensed Consolidated Balance Sheets. Additionally, a guaranty obligation is presented as a component of Other liabilities on the Condensed Consolidated Balance Sheets.

Activity related to the allowance for risk-sharing obligations for the three and six months ended June 30, 2022 and 2021 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Allowance for Risk-Sharing Obligations (in thousands)	2022		2021		2022		2021
Beginning balance	$	53,244	$	64,580	$	62,636	$	75,313
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Write-offs		—		—		—		—
Ending balance	$	48,475	$	60,329	$	48,475	$	60,329

During the first quarter of 2022, the Company updated its historical loss rate factor calculation to the current 10-year rolling period, with no change during the three months ended June 30, 2022. The historical loss rate used for the calculation of the CECL reserve was 1.2 basis points as of June 30, 2022 compared to 1.8 basis points as of December 31, 2021, contributing to the benefit for risk-sharing obligations for the six months ended June 30, 2022 presented above. During the second quarter of 2022, the Company updated its estimate of the forecast-period loss rate to 2.2 basis points from three basis points as of March 31, 2022, based on (i) the projected unemployment rate, (ii) overall health of the multifamily market, and (iii) other information expected during the forecast-period and reverted over a one-year period to the

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aforementioned 1.2 basis points historical loss rate. The change in the forecast-period loss rate led to the benefit for risk-sharing obligations for the three months ended June 30, 2022, presented above, and contributed to the benefit for the six months ended June 30, 2022 presented above.

During the first half of 2021, reported and forecasted unemployment rates significantly improved compared to December 31, 2020. In response to improving unemployment statistics and the expected continued overall health of the multifamily market, the Company reduced the loss rate for the forecast period to four basis points as of March 31, 2021 and three basis points as of June 30, 2021 from six basis points as of December 31, 2020, resulting in the benefit for risk-sharing obligations for the three and six months ended June 30, 2021, as presented above.

The calculated CECL reserve for the Company’s $51.2 billion at-risk Fannie Mae servicing portfolio as of June 30, 2022 was $37.7 million compared to $52.3 million as of December 31, 2021. The weighted-average remaining life of the at-risk Fannie Mae servicing portfolio as of June 30, 2022 was 7.3 years compared to 7.5 years as of December 31, 2021.

Three loans had aggregate collateral-based reserves of $10.8 million and $10.3 million as of June 30, 2022 and December 31, 2021, respectively.

Activity related to the guaranty obligation for the three and six months ended June 30, 2022 and 2021 is presented in the following table:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Guaranty Obligation (in thousands)	2022		2021		2022		2021
Beginning balance	$	46,490	$	51,836	$	47,378	$	52,306
Additions, following the sale of loan		1,759		853		3,310		2,574
Amortization and write-offs		(2,600)		(2,320)		(5,039)		(4,511)
Ending balance	$	45,649	$	50,369	$	45,649	$	50,369

As of June 30, 2022 and 2021, the maximum quantifiable contingent liability associated with the Company’s guaranties for the at-risk loans serviced under the Fannie Mae DUS agreement was $10.5 billion and $9.5 billion, respectively. This maximum quantifiable contingent liability relates to the at-risk loans serviced for Fannie Mae at the specific point in time indicated. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans were determined to be without value at the time of settlement.

NOTE 5—SERVICING

The total unpaid principal balance of loans the Company was servicing for various institutional investors was $119.0 billion as of June 30, 2022 compared to $115.7 billion as of December 31, 2021.

As of June 30, 2022 and December 31, 2021, custodial escrow accounts relating to loans serviced by the Company totaled $2.3 billion and $3.7 billion, respectively. These amounts are not included in the Condensed Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to earn fees on these escrow balances, presented as a component of Escrow earnings and other interest income in the Condensed Consolidated Statements of Income. Certain cash deposits at other financial institutions exceed the Federal Deposit Insurance Corporation insured limits. The Company places these deposits with financial institutions that meet the requirements of the Agencies and where it believes the risk of loss to be minimal.

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NOTE 6—WAREHOUSE NOTES PAYABLE

As of June 30, 2022, to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $3.9 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company’s approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of financings on acceptable terms.

Additionally, as of June 30, 2022, the Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate loans held for investment depends upon its ability to secure and maintain these types of financings on acceptable terms.  

The Company also has a warehouse line of credit in the amount of $30.0 million with a national bank to assist in funding the Company’s Committed investments in tax credit equity before transferring them to a tax credit fund (“Tax Credit Equity Warehouse Facility”).

The maximum amount and outstanding borrowings under Warehouse notes payable at June 30, 2022 follows.

	June 30, 2022
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility	Amount		Amount		Capacity		Balance		Interest rate(1)
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	105,286	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		272,369	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		287,275	Adjusted Term SOFR plus 1.35%
Agency Warehouse Facility #4		200,000		225,000		425,000		128,251	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		68,804	Adjusted Term SOFR plus 1.45%
Agency Warehouse Facility #6		150,000		50,000		200,000		—	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,075,000	$	1,840,000	$	3,915,000	$	861,985
Fannie Mae repurchase agreement, uncommitted line and open maturity		—		1,500,000		1,500,000		71,119
Total Agency Warehouse Facilities	$	2,075,000	$	3,340,000	$	5,415,000	$	933,104
Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	Adjusted Term SOFR plus 1.80%
Interim Warehouse Facility #2		100,000		—		100,000		—	Adjusted Term SOFR plus 1.35% to 1.85%
Interim Warehouse Facility #3		200,000		—		200,000		163,468	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities	$	454,810	$	—	$	454,810	$	183,278
Tax Credit Equity Warehouse Facility	$	30,000	$	—	$	30,000	$	9,777	Adjusted Daily SOFR plus 3.00%
Debt issuance costs		—		—		—		(482)
Total warehouse facilities	$	2,559,810	$	3,340,000	$	5,899,810	$	1,125,677

(1) Interest rate presented does not include the effect of any applicable interest rate floors.

During 2022, the following amendments to the Warehouse Facilities were executed in the normal course of business to support the growth of the Company’s business.  

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Agency Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment to Agency Warehouse Facility #2 that extended the maturity date to April 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #3 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 basis points with an Adjusted Term SOFR floor of 15 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #4 that extended the maturity date to June 22, 2023, increased the total borrowing capacity to $425 million from $350 million, and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

Interim Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #1 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 180 basis points. No other material modifications have been made to the agreement during 2022.

During the first quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #2 that extended the maturity date to December 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 to 185 basis points. No other material modifications have been made to the agreement during 2022.

Tax Credit Equity Warehouse Facility

During 2022, the Company executed amendments related to the Tax Credit Equity Warehouse Facility that extended the maturity date to August 30, 2022. Additionally, the amendments transitioned the interest rate from Daily LIBOR plus 300 basis points to Adjusted Daily SOFR plus 300 basis points, with a SOFR floor of 150 basis points. No other material modifications have been made to the agreement during 2022.

The warehouse notes payable are subject to various financial covenants, all of which the Company was in compliance with as of June 30, 2022. Interest on the Company’s warehouse notes payable is based on 30-day LIBOR, Adjusted Term SOFR, or Adjusted Daily SOFR. As a result of the expected transition from LIBOR, the Company has updated its debt agreements to include fallback language to govern the transition from 30-day LIBOR to an alternative reference rate.  

NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Acquisition Activities

A summary of the Company’s goodwill for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Goodwill (in thousands)	2022		2021
Beginning balance	$	698,635	$	248,958
Additions from acquisitions		213,874		17,507
Measurement-period adjustments		25,372		—
Impairment		—		—
Ending balance	$	937,881	$	266,465

The addition to goodwill from acquisitions during 2022 shown in the table above during the six months ended June 30, 2022 relates to the Company’s February 28, 2022 acquisition of 100% of the equity interests of GeoPhy B.V. (“GeoPhy”), a Netherlands-based commercial real-estate technology company. As part of the acquisition, the Company also obtained GeoPhy’s 50% interest in the Company’s appraisal joint

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venture, Apprise. The Company now owns 100% of Apprise and consolidates its balances and its operating results post acquisition. Prior to the acquisition, the Company accounted for its investment in Apprise under the equity method. The fair value of the consideration was $210.1 million and consisted of $87.6 million of cash, $5.5 million of forgiveness of a receivable the Company had with the joint venture (non-cash activity not reflected in the Condensed Consolidated Statements of Cash Flows), and $117.0 million of contingent consideration.

GeoPhy’s data analytics and technology development capabilities are expected to accelerate the growth of the Company’s lending, brokerage, and appraisal operations. The GeoPhy acquisition is also expected to allow the Company to meet its goal of $5 billion of annual small-balance lending volume and appraisal revenue of $75 million by 2025 as part of the Company’s overall growth targets. A significant portion of the value associated with the GeoPhy acquisition was related to the assembled workforces with their combined expertise in information technology, data science, and commercial real estate. The Company believes that the combination of GeoPhy’s personnel, appraisal technology platform, and the future development of technology to accelerate growth in the origination of small-balance commercial loans, along with Walker & Dunlop’s financial resources will (i) drive a significant increase in the identification and retention of borrowers in the small-balance segment of the multifamily market and (ii) continue to drive significant growth in appraisal revenues over the next five years. GeoPhy’s financial results since the acquisition and pro-forma information as if the acquisition occurred January 1, 2021 were immaterial.

The contingent consideration noted above is contingent on achieving certain Apprise revenue and productivity milestones and small-balance loan volume and revenue milestones over a four-year period. The maximum earnout included as part of the GeoPhy acquisition is $205.0 million. The Company estimated that $132.7 million, or 65% of the maximum earnout, is achievable based on management forecasts. The discounted balance of $117.0 million is 57% of the maximum earnout amount. The Company estimated the fair value of this contingent consideration using a Monte Carlo simulation. The weighted average cost of capital (“WACC”) used for the valuation of the contingent consideration was 17.0% for the Apprise portion of the earnout and 14.5% for the small-balance portion of the earnout. The WACC reflects the additional risk inherent in the Apprise performance estimates as it is still in the startup stage of its development. The estimated achievable earnout amount was discounted using a forward curve for a Company-specific subordinated debt rating.

The calculation of goodwill of $211.9 million included the fair value of the consideration transferred of $210.1 million and the acquisition-date fair value of the Company’s previously-held equity-method investment in Apprise of $58.5 million. The book value of the Company’s equity-method investment in Apprise prior to the acquisition date was $18.9 million, resulting in a $39.6 million gain from remeasuring to fair value. The gain is included as a component of Other revenues in the Condensed Consolidated Statements of Income. The Company used a discounted cash flow model to estimate the acquisition-date fair value of Apprise, with the discount rate and management’s forecast of future revenues and cash flows as the most-significant inputs for the estimate. The discount rate used was 17.0%, and a control premium was not included in the estimate.

The Company expects a large portion of the goodwill to be tax deductible, with the tax-deductible amount of goodwill related to the contingent consideration to be determined once the cash payments to settle the contingent consideration are made. The goodwill resulting from the GeoPhy acquisition was allocated to the Company’s Capital Markets reportable segment. The other assets primarily consisted of technology intangible assets of $31.0 million and deferred tax assets of $9.4 million. The technology intangible assets will be amortized over a 10-year period. Immaterial liabilities were assumed.

As of June 30, 2022, the amounts recorded for the GeoPhy acquisition were provisional as the Company had not completed the purchase accounting for the GeoPhy acquisition as it awaits additional tax information.

The measurement-period adjustments above primarily relate to the Company’s acquisition of Alliant Capital Ltd. (“Alliant”), an acquisition completed in December of 2021, as more fully described in the Company’s 2021 Form 10-K. The measurement-period adjustments consist of (i) $29.7 million additional purchase price consideration related to the settlement of working capital adjustments and (ii) immaterial other adjustments. The additional consideration was paid during the third quarter of 2022. The Company has substantially completed the purchase accounting for the Alliant acquisition as of June 30, 2022.

As discussed in NOTE 11 below and beginning in the first quarter of 2022, the Company now has three reportable segments. The following table shows goodwill by reportable segments as of June 30, 2022. As the Company did not have segment reporting as of December 31, 2021, all of the goodwill balance was allocated to the Company’s one reportable segment as of December 31, 2021. As noted above, the additions in the first quarter of 2022 were allocated to Capital Markets, and the measurement-period adjustments relate to both Capital Markets and Servicing & Asset Management.

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Goodwill by Reportable Segment (in thousands)	As of June 30, 2022
Capital Markets	$	448,048
Servicing & Asset Management		489,833
Corporate		—
Ending balance	$	937,881

Other Intangible Assets

Activity related to other intangible assets for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Other Intangible Assets (in thousands)	2022		2021
Beginning balance	$	183,904	$	1,880
Additions from acquisitions		31,000		504
Amortization		(7,880)		(831)
Ending balance	$	207,024	$	1,553

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s other intangible assets as of June 30, 2022 and December 31, 2021:

Components of Other Intangible Assets (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	220,682	$	189,682
Accumulated amortization		(13,658)		(5,778)
Net carrying value	$	207,024	$	183,904

The expected amortization of other intangible assets shown in the Condensed Consolidated Balance Sheet as of June 30, 2022 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	8,870
Year Ending December 31,
2023	$	17,303
2024		16,246
2025		16,206
2026		16,206
2027		16,206
Thereafter		115,987
Total	$	207,024

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Contingent Consideration Liabilities

A summary of the Company’s contingent consideration liabilities, which are included in Other liabilities in the Condensed Consolidated Balance Sheets, as of and for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Contingent Consideration Liabilities (in thousands)	2022		2021
Beginning balance	$	125,808	$	28,829
Additions		117,000		7,504
Accretion and revaluation		1,823		906
Payments		(26,439)		—
Ending balance	$	218,192	$	37,239

The contingent consideration liabilities presented in the table above relate to (i) acquisitions of debt brokerage companies and an investment sales brokerage company completed over the past several years, (ii) the purchase of noncontrolling interests in 2020 that was fully earned as of December 31, 2021 and paid in 2022, (iii) the Alliant acquisition, and (iv) the GeoPhy acquisition. The contingent consideration for each of the acquisitions may be earned over various lengths of time after each acquisition, with a maximum earn-out period of five years, provided certain revenue targets and other metrics have been met. The last of the earn-out periods related to the contingent consideration ends in the first quarter of 2026. In each case, the Company estimated the initial fair value of the contingent consideration using a Monte Carlo simulation.

The recognition of the contingent consideration liability for the GeoPhy acquisition is non-cash, and thus not reflected in the amount of cash consideration paid on the Condensed Consolidated Statements of Cash Flows. In addition, $8.8 million of the payments settling contingent consideration liabilities included in the table above for the six months ended June 30, 2022 were from the issuance of the Company’s common stock, a non-cash transaction.

NOTE 8—FAIR VALUE MEASUREMENTS

The Company uses valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

● Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

● Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, discount rates, volatilities, prepayment speeds, earnings rates, credit risk, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

● Level 3—Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation.

The Company's MSRs are measured at fair value at inception, and thereafter on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. Accordingly, the estimated

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fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated revenue from escrow accounts, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that market participants consider in valuing MSR assets. MSRs are carried at the lower of amortized cost or fair value.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

● Derivative Instruments—The derivative positions consist of interest rate lock commitments with borrowers and forward sale agreements to the Agencies. The fair value of these instruments is estimated using a discounted cash flow model developed based on changes in the applicable U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company, and are classified within Level 3 of the valuation hierarchy.

● Loans Held for Sale—All loans held for sale presented in the Condensed Consolidated Balance Sheets are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted observable inputs from market participants such as changes in the U.S. Treasury rate. Therefore, the Company classifies these loans held for sale as Level 2.

● Pledged Securities—Investments in money market funds are valued using quoted market prices from recent trades. Therefore, the Company classifies this portion of pledged securities as Level 1. The Company determines the fair value of its AFS investments in Agency debt securities using discounted cash flows that incorporate observable inputs from market participants and then compares the fair value to broker estimates of fair value. Consequently, the Company classifies this portion of pledged securities as Level 2.

● Contingent Consideration Liabilities—Contingent consideration liabilities from acquisitions are initially recognized at fair value at acquisition and subsequently remeasured based on the change in probability of achievement of the performance objectives and fair value accretion. The remeasurement and fair value accretion are recognized as Other operating expenses in the Condensed Consolidated Statements of Income. The Company determines the fair value of each contingent consideration liability based on a combination of Monte Carlo simulations and probability of achievement estimates, which incorporates management estimates. As a result, the Company classifies these liabilities as Level 3.

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The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value:

							Balance as of
(in thousands)	Level 1		Level 2		Level 3		Period End
June 30, 2022
Assets
Loans held for sale	$	—	$	931,516	$	—	$	931,516
Pledged securities		10,149		139,411		—		149,560
Derivative assets		—		—		59,810		59,810
Total	$	10,149	$	1,070,927	$	59,810	$	1,140,886
Liabilities
Derivative liabilities	$	—	$	—	$	17,176	$	17,176
Contingent consideration liabilities		—		—		218,192		218,192
Total	$	—	$	—	$	235,368	$	235,368
December 31, 2021
Assets
Loans held for sale	$	—	$	1,811,586	$	—	$	1,811,586
Pledged securities		44,733		104,263		—		148,996
Derivative assets		—		—		37,364		37,364
Total	$	44,733	$	1,915,849	$	37,364	$	1,997,946
Liabilities
Derivative liabilities	$	—	$	—	$	6,403	$	6,403
Contingent consideration liabilities		—		—		125,808		125,808
Total	$	—	$	—	$	132,211	$	132,211

There were no transfers between any of the levels within the fair value hierarchy during the six months ended June 30, 2022.

Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days). A roll forward of derivative instruments is presented below for the three and six months ended June 30, 2022 and 2021:

	For the three months ended				For the six months ended
	June 30,				June 30,
Derivative Assets and Liabilities, net (in thousands)	2022		2021		2022		2021
Beginning balance	$	99,623	$	48,880	$	30,961	$	44,720
Settlements		(211,543)		(211,771)		(277,921)		(341,515)
Realized gains recorded in earnings(1)		111,920		162,891		246,960		296,795
Unrealized gains (losses) recorded in earnings(1)		42,634		6,340		42,634		6,340
Ending balance	$	42,634	$	6,340	$	42,634	$	6,340

(1) Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Condensed Consolidated Statements of Income.

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The following table presents information about significant unobservable inputs used in the recurring measurement of the fair value of the Company’s Level 3 assets and liabilities as of June 30, 2022:

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value		Valuation Technique	Unobservable Input (1)	Input Range (1)	Weighted Average (3)
Derivative assets	$	59,810	Discounted cash flow	Counterparty credit risk	—	—
Derivative liabilities	$	17,176	Discounted cash flow	Counterparty credit risk	—	—
Contingent consideration liabilities	$	218,192	Various(2)	Probability of earn-out achievement	65% - 100%	76%

(1) Significant increases in this input may lead to significantly lower fair value measurements.

(2) Primary valuation technique used was a Monte Carlo simulation analysis.

(3) Contingent consideration weighted based on maximum gross earn-out amount.

The carrying amounts and the fair values of the Company's financial instruments as of June 30, 2022 and December 31, 2021 are presented below:

	June 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
(in thousands)	Amount		Value		Amount		Value
Financial Assets:
Cash and cash equivalents	$	151,252	$	151,252	$	305,635	$	305,635
Restricted cash		34,361		34,361		42,812		42,812
Pledged securities		149,560		149,560		148,996		148,996
Loans held for sale		931,516		931,516		1,811,586		1,811,586
Loans held for investment, net		247,243		248,383		269,125		270,826
Derivative assets		59,810		59,810		37,364		37,364
Total financial assets	$	1,573,742	$	1,574,882	$	2,615,518	$	2,617,219
Financial Liabilities:
Derivative liabilities	$	17,176	$	17,176	$	6,403	$	6,403
Contingent consideration liabilities		218,192		218,192		125,808		125,808
Warehouse notes payable		1,125,677		1,126,159		1,941,572		1,942,448
Notes payable		719,210		723,931		740,174		745,175
Total financial liabilities	$	2,080,255	$	2,085,458	$	2,813,957	$	2,819,834

The following methods and assumptions were used for recurring fair value measurements as of June 30, 2022 and December 31, 2021.

Cash and Cash Equivalents and Restricted Cash—The carrying amounts approximate fair value because of the short maturity of these instruments (Level 1).

Pledged Securities—Consist of cash, highly liquid investments in money market accounts invested in government securities, and investments in Agency debt securities. The investments of the money market funds typically have maturities of 90 days or less and are valued using quoted market prices from recent trades. The fair value of the Agency debt securities incorporates the contractual cash flows of the security discounted at market-rate, risk-adjusted yields.

Loans Held for Sale—Consist of originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded and are valued using discounted cash flow models that incorporate observable prices from market participants.

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Contingent Consideration Liability—Consists of the estimated fair values of expected future earn-out payments related to acquisitions completed over the past several years, including 2022. The earn-out liabilities are valued using a Monte Carlo simulation analysis. The fair value of the contingent consideration liabilities incorporates unobservable inputs, such as the probability of earn-out achievement, volatility rates, and discount rate, to determine the expected earn-out cash flows. The probability of the earn-out achievement is based on management’s estimate of the expected future performance and other financial metrics of each of the acquired entities, which are subject to significant uncertainty.

Derivative Instruments—Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company.

Fair Value of Derivative Instruments and Loans Held for Sale—In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor.

To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into a sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income. The fair value of the Company's rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:

● the estimated gain of the expected loan sale to the investor (Level 2);

● the expected net cash flows associated with servicing the loan, net of any guaranty obligations retained (Level 2);

● the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

● the nonperformance risk of both the counterparty and the Company (Level 3; derivative instruments only).

The estimated gain considers the origination fees the Company expects to collect upon loan closing (derivative instruments only) and premiums the Company expects to receive upon sale of the loan (Level 2). The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques applicable to the fair value of future servicing, net at loan sale (Level 2).

To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount (Level 2).

The fair value of the Company's forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in interest rate lock commitments and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties and the short duration of interest rate lock commitments and forward sale contracts, the risk of nonperformance by the Company’s counterparties has historically been minimal (Level 3).

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The following table presents the components of fair value and other relevant information associated with the Company’s derivative instruments and loans held for sale as of June 30, 2022 and December 31, 2021:

			Fair Value Adjustment Components						Balance Sheet Location
													Fair Value
	Notional or		Estimated				Total						Adjustment
	Principal		Gain		Interest Rate		Fair Value		Derivative		Derivative		to Loans
(in thousands)	Amount		on Sale		Movement		Adjustment		Assets		Liabilities		Held for Sale
June 30, 2022
Rate lock commitments	$	820,439	$	20,105	$	12,556	$	32,661	$	33,386	$	(725)	$	—
Forward sale contracts		1,753,635		—		9,973		9,973		26,424		(16,451)		—
Loans held for sale		933,196		20,849		(22,529)		(1,680)		—		—		(1,680)
Total			$	40,954	$	—	$	40,954	$	59,810	$	(17,176)	$	(1,680)
December 31, 2021
Rate lock commitments	$	1,115,829	$	29,837	$	(4,604)	$	25,233	$	26,526	$	(1,293)	$	—
Forward sale contracts		2,881,224		—		5,728		5,728		10,838		(5,110)		—
Loans held for sale		1,765,395		47,315		(1,124)		46,191		—		—		46,191
Total			$	77,152	$	—	$	77,152	$	37,364	$	(6,403)	$	46,191

NOTE 9—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Fannie Mae DUS Related Commitments—Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing, and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 8, the Company accounts for these commitments as derivatives recorded at fair value.

The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Condensed Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5%, and Agency mortgage-backed securities (“Agency MBS”) are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held the majority of its pledged securities in Agency MBS as of June 30, 2022. The majority of the loans for which the Company has risk sharing are Tier 2 loans.

The Company is in compliance with the June 30, 2022 collateral requirements as outlined above. As of June 30, 2022, reserve requirements for the DUS loan portfolio will require the Company to fund $70.4 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has in the past reassessed the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future increases to collateral requirements may adversely impact the Company’s available cash.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if, at any time, it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of June 30, 2022. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. At June 30, 2022, the net worth requirement was $266.2 million, and the Company's net worth, as defined in the requirements, was $621.6 million, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC. As of June 30, 2022, the Company was required to maintain at least $52.8 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae, and the Company had operational liquidity, as defined in the requirements, of $116.0 million as of June 30, 2022, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC.

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Pledged Securities, at Fair Value—Pledged securities, at fair value consisted of the following balances as of June 30, 2022 and 2021 and December 31, 2021 and 2020:

	June 30,				December 31,
Pledged Securities (in thousands)	2022		2021		2021		2020
Restricted cash	$	5,979	$	7,442	$	3,779	$	4,954
Money market funds		4,170		39,954		40,954		12,519
Total pledged cash and cash equivalents	$	10,149	$	47,396	$	44,733	$	17,473
Agency MBS		139,411		99,152		104,263		119,763
Total pledged securities, at fair value	$	149,560	$	146,548	$	148,996	$	137,236

The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Condensed Consolidated Statements of Cash Flows as more fully discussed in NOTE 2.

The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency MBS and are all accounted for as AFS securities. When the fair value of Agency MBS is lower than the carrying value, the Company assesses whether an allowance for credit losses is necessary. The Company does not record an allowance for credit losses for its AFS securities, including those whose fair value is less than amortized cost, when the AFS securities are issued by the GSEs. The contractual cash flows of these AFS securities are guaranteed by the GSEs, which are government-sponsored enterprises under the conservatorship of the Federal Housing Finance Agency. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of these securities. The Company does not intend to sell any of the Agency MBS whose fair value is less than the carrying value, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The following table provides additional information related to the Agency MBS as of June 30, 2022 and December 31, 2021:

Fair Value and Amortized Cost of Agency MBS (in thousands)	June 30, 2022		December 31, 2021
Fair value	$	139,411	$	104,263
Amortized cost		139,737		100,847
Total gains for securities with net gains in AOCI		1,242		3,636
Total losses for securities with net losses in AOCI		(1,568)		(220)
Fair value of securities with unrealized losses		104,433		4,757

An immaterial amount of the pledged securities has been in a continuous unrealized loss position for more than 12 months.

The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date.

	June 30, 2022
Detail of Agency MBS Maturities (in thousands)	Fair Value		Amortized Cost
Within one year	$	—	$	—
After one year through five years		13,901		13,903
After five years through ten years		100,704		100,835
After ten years		24,806		24,999
Total	$	139,411	$	139,737

NOTE 10—EARNINGS PER SHARE AND STOCKHOLDERS’ EQUITY

Earnings per share (“EPS”) is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2020 Equity Incentive Plan that entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities.

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The following table presents the calculation of basic and diluted EPS for the three and six months ended June 30, 2022 and 2021 under the two-class method. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method.

	For the three months ended June 30,				For the six months ended June 30,
EPS Calculations (in thousands, except per share amounts)	2022		2021		2022		2021
Calculation of basic EPS
Walker & Dunlop net income	$	54,286	$	56,058	$	125,495	$	114,110
Less: dividends and undistributed earnings allocated to participating securities		1,554		1,831		3,708		3,798
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Basic EPS	$	1.63	$	1.75	$	3.77	$	3.57
Calculation of diluted EPS
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Add: reallocation of dividends and undistributed earnings based on assumed conversion		9		14		27		34
Net income allocated to common stockholders	$	52,741	$	54,241	$	121,814	$	110,346
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Add: weighted-average diluted non-participating securities		306		351		353		400
Weighted-average diluted shares outstanding		32,694		31,370		32,657		31,322
Diluted EPS	$	1.61	$	1.73	$	3.73	$	3.52

The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury-stock method includes the unrecognized compensation costs associated with the awards. For the three and six months ended June 30, 2022, 136 thousand average restricted shares and 87 thousand average restricted shares, respectively, were excluded. An immaterial number of average restricted shares were excluded from the computation of diluted EPS under the treasury-stock method for the three and six months ended June 30, 2021. These average restricted shares were excluded from the computation of diluted EPS under the treasury method  because the effect would have been anti-dilutive, as the grant date market price of the restricted shares was greater than the average market price of the Company’s shares of common stock during the periods presented.

The following non-cash transactions did not impact the amount of cash paid on the Condensed Consolidated Statements of Cash Flows. During 2022, the operating agreement of three of the Company’s tax-credit-related joint ventures changed. The Company reconsidered its consolidation conclusion based on these changes and concluded that the joint ventures should be consolidated, resulting in a $3.7 million increase in APIC and $6.8 million of noncontrolling interests consolidated as shown on the Consolidated Statements of Changes in Equity for the six months ended June 30, 2022. The consolidation also resulted in a $35.0 million increase in Receivables, net, a $21.3 million reduction in Other assets, and a $3.6 million increase in Other liabilities.

In February 2022, the Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 13, 2022. During the first quarter of 2022, the Company did not repurchase any shares of its common stock under the share repurchase program. During the second quarter of 2022, the Company repurchased 109 thousand shares of its common stock under the 2022 share repurchase program at a weighted-average price of $101.77 per share and immediately retired the shares, reducing stockholders’ equity by $11.1 million. As of June 30, 2022, the Company had $63.9 million of authorized share repurchase capacity remaining under the 2022 share repurchase program.

During each of the first and second quarters of 2022, the Company paid a dividend of $0.60 per share. On August 3, 2022, the Company’s Board of Directors declared a dividend of $0.60 per share for the third quarter of 2022. The dividend will be paid on September 2, 2022 to all holders of record of the Company’s restricted and unrestricted common stock as of August 18, 2022.

The Company’s Note Payable (“Term Loan”) contains direct restrictions to the amount of dividends the Company may pay, and the warehouse debt facilities and agreements with the Agencies contain minimum equity, liquidity, and other capital requirements that indirectly restrict the amount of dividends the Company may pay. The Company does not believe that these restrictions currently limit the amount of dividends the Company can pay for the foreseeable future.

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NOTE 11—SEGMENTS

In the first quarter of 2022, as a result of the Company’s growth and recent acquisitions, the Company’s executive leadership team, which functions as the Company’s chief operating decision making body, began making decisions and assessing performance based on the following three operating segments. The operating segments are determined based on the product or service provided and reflect the manner in which management is currently evaluating the Company’s financial information.  

(i) Capital Markets (“CM”)—CM provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, and appraisal and valuation services. The Company’s long-established relationships with the Agencies and institutional investors enable CM to offer a broad range of loan products and services to the Company’s customers, including first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, and small-balance loans. CM provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various investors.

As part of Agency lending, CM temporarily funds the loans it originates (loans held for sale) before selling them to the Agencies and earns net interest income on the spread between the interest income on the loans and the warehouse interest expense. For Agency loans, CM recognizes the fair value of expected net cash flows from servicing, which represents the right to receive future servicing fees. CM also earns fees for origination of loans for both Agency lending and debt brokerage and fees for property sales and appraisals. Direct internal, including compensation, and external costs that are specific to CM are included within the results of this operating segment.

(ii) Servicing & Asset Management (“SAM”)—SAM’s activities include: (i) servicing and asset-managing the portfolio of loans the Company (a) originates and sells to the Agencies, (b) brokers to certain life insurance companies, and (c) originates through its principal lending and investing activities, (ii) managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate, and (iii) real estate-related investment banking and advisory services, including housing market research.

SAM earns revenue through (i) fees for servicing the loans in the Company’s servicing portfolio, (ii) asset management fees for managing third-party capital invested in funds, primarily LIHTC tax credit funds, (iii) subscription revenue for its housing market research, and (iv) net interest income on the spread between the interest income on the loans and the warehouse interest expense for loans held for investment. Direct internal, including compensation, and external costs that are specific to SAM are included within the results of this operating segment.

(iii) Corporate—The Corporate segment consists primarily of the Company’s treasury operations and other corporate-level activities. The Company’s treasury activities include monitoring and managing liquidity and funding requirements, including corporate debt. Other corporate-level activities include strategic equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups (“support functions”). The Company does not allocate costs from these support functions to the CM or SAM segments in presenting segment operating results, other than income tax expense, which is allocated proportionally based on income from operations at each segment.

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The following tables provide a summary and reconciliation of each segment’s results for the three months ended June 30, 2022 and 2021.

	For the three months ended June 30, 2022
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	102,085	$	520	$	—	$	102,605
Fair value of expected net cash flows from servicing, net			51,949		—		—		51,949
Servicing fees			—		74,260		—		74,260
Property sales broker fees			46,386		—		—		46,386
Investment management fees			—		10,282		—		10,282
Net warehouse interest income			3,707		1,561		—		5,268
Escrow earnings and other interest income			—		6,648		103		6,751
Other revenues			3,895		39,280		172		43,347
Total revenues		$	208,022	$	132,551	$	275	$	340,848
Expenses
Personnel		$	138,913	$	21,881	$	7,574	$	168,368
Amortization and depreciation			810		58,760		1,533		61,103
Provision (benefit) for credit losses			—		(4,840)		—		(4,840)
Interest expense on corporate debt			—		—		6,412		6,412
Other operating expenses			4,583		6,559		25,053		36,195
Total expenses		$	144,306	$	82,360	$	40,572	$	267,238
Income from operations		$	63,716	$	50,191	$	(40,297)	$	73,610
Income tax expense			16,476		12,850		(9,823)		19,503
Net income before noncontrolling interests		$	47,240	$	37,341	$	(30,474)	$	54,107
Less: net income (loss) from noncontrolling interests			—		(179)		—		(179)
Walker & Dunlop net income		$	47,240	$	37,520	$	(30,474)	$	54,286

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	For the three months ended June 30, 2021
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	105,583	$	1,889	$	—	$	107,472
Fair value of expected net cash flows from servicing, net			61,849		—		—		61,849
Servicing fees			—		69,052		—		69,052
Property sales broker fees			22,454		—		—		22,454
Investment management fees			—		3,815		—		3,815
Net warehouse interest income			2,884		1,746		—		4,630
Escrow earnings and other interest income			—		1,768		55		1,823
Other revenues			3,135		6,885		296		10,316
Total revenues		$	195,905	$	85,155	$	351	$	281,411
Expenses
Personnel		$	119,994	$	9,447	$	11,980	$	141,421
Amortization and depreciation			18		47,395		1,097		48,510
Provision (benefit) for credit losses			—		(4,326)		—		(4,326)
Interest expense on corporate debt			—		—		1,760		1,760
Other operating expenses			3,598		2,604		13,546		19,748
Total expenses		$	123,610	$	55,120	$	28,383	$	207,113
Income from operations		$	72,295	$	30,035	$	(28,032)	$	74,298
Income tax expense			17,739		7,475		(6,974)		18,240
Net income before noncontrolling interests		$	54,556	$	22,560	$	(21,058)	$	56,058
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	54,556	$	22,560	$	(21,058)	$	56,058

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The following tables provide a summary and reconciliation of each segment’s results for the six months ended June 30, 2022 and 2021 and total assets as of June 30, 2022 and 2021.

	As of and for the six months ended June 30, 2022
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	183,908	$	1,007	$	—	$	184,915
Fair value of expected net cash flows from servicing, net			104,679		—		—		104,679
Servicing fees			—		146,941		—		146,941
Property sales broker fees			69,784		—		—		69,784
Investment management fees			—		22,930		—		22,930
Net warehouse interest income			7,237		2,804		—		10,041
Escrow earnings and other interest income			—		8,406		148		8,554
Other revenues			6,658		61,529		44,261		112,448
Total revenues		$	372,266	$	243,617	$	44,409	$	660,292
Expenses
Personnel		$	237,639	$	40,519	$	34,391	$	312,549
Amortization and depreciation			810		113,691		2,754		117,255
Provision (benefit) for credit losses			—		(14,338)		—		(14,338)
Interest expense on corporate debt			—		—		12,817		12,817
Other operating expenses			10,694		12,678		45,037		68,409
Total expenses		$	249,143	$	152,550	$	94,999	$	496,692
Income from operations		$	123,123	$	91,067	$	(50,590)	$	163,600
Income tax expense			29,323		21,689		(12,049)		38,963
Net income before noncontrolling interests		$	93,800	$	69,378	$	(38,541)	$	124,637
Less: net income (loss) from noncontrolling interests			—		(858)		—		(858)
Walker & Dunlop net income		$	93,800	$	70,236	$	(38,541)	$	125,495
Total assets		$	1,611,951	$	2,607,990	$	314,831	$	4,534,772

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	As of and for the six months ended June 30, 2021
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	180,878	$	2,473	$	—	$	183,351
Fair value of expected net cash flows from servicing, net			119,784		—		—		119,784
Servicing fees			—		135,030		—		135,030
Property sales broker fees			31,496		—		—		31,496
Investment management fees			—		6,551		—		6,551
Net warehouse interest income			5,343		3,842		—		9,185
Escrow earnings and other interest income			—		3,767		173		3,940
Other revenues			5,695		11,657		(990)		16,362
Total revenues		$	343,196	$	163,320	$	(817)	$	505,699
Expenses
Personnel		$	192,629	$	16,558	$	28,449	$	237,636
Amortization and depreciation			539		92,773		2,069		95,381
Provision (benefit) for credit losses			—		(15,646)		—		(15,646)
Interest expense on corporate debt			—		—		3,525		3,525
Other operating expenses			7,000		4,857		25,478		37,335
Total expenses		$	200,168	$	98,542	$	59,521	$	358,231
Income from operations		$	143,028	$	64,778	$	(60,338)	$	147,468
Income tax expense			32,354		14,653		(13,649)		33,358
Net income before noncontrolling interests		$	110,674	$	50,125	$	(46,689)	$	114,110
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	110,674	$	50,125	$	(46,689)	$	114,110
Total assets		$	2,070,549	$	1,404,895	$	467,677	$	3,943,121

NOTE 12—VARIABLE INTEREST ENTITIES

The Company, through its subsidiary Alliant, provides alternative investment management services through the syndication of tax credit funds and the joint development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are VIEs.

A detailed discussion of the Company’s accounting policies regarding the consolidation of VIEs and significant transactions involving VIEs is included in NOTE 2 and NOTE 17 of the Company’s 2021 Form 10-K.

During 2022, the operating agreement of three of the Company’s joint ventures changed, resulting in the Company gaining the power to direct the activities that most significantly impact the economic performance of the joint venture; previously, the Company only held rights to receive the significant economic benefits of the joint venture. The Company reassessed its consolidation conclusion and determined that it was the primary beneficiary and as a result consolidated the joint venture as of as March 31, 2022. As of June 30, 2022 and December 31, 2021, the assets and liabilities of the consolidated tax credit funds were immaterial.

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The table below presents the assets and liabilities of the Company’s consolidated joint development VIEs included in the Condensed Consolidated Balance Sheets:

Consolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	1,101	$	—
Restricted cash		1,049		—
Receivables, net		34,051		—
Other Assets		49,224		54,880
Total assets of consolidated VIEs	$	85,425	$	54,880
Liabilities:
Other liabilities	$	33,662	$	36,480
Total liabilities of consolidated VIEs	$	33,662	$	36,480

The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Condensed Consolidated Balance Sheets:

Nonconsolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets
Committed investments in tax credit equity	$	187,393	$	177,322
Other assets: Equity-method investments		55,970		74,997
Total interests in nonconsolidated VIEs	$	243,363	$	252,319
Liabilities
Commitments to fund investments in tax credit equity		173,740		162,747
Total commitments to fund nonconsolidated VIEs	$	173,740	$	162,747
Maximum exposure to losses(1)(2)	$	243,363	$	252,319

(1) Maximum exposure determined as Total interests in nonconsolidated VIEs. The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above.

(2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the historical financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”). The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those expressed or contemplated in those forward-looking statements as a result of certain factors, including those set forth under the headings “Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”).

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc. and subsidiaries (the “Company,” “Walker & Dunlop,” “we,” or “us”), may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking:

● the future of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “GSEs”), including their existence, relationship to the U.S. federal government, origination capacities, and their impact on our business;

● changes to and trends in the interest rate environment and its impact on our business;

● our growth strategy;

● our projected financial condition, liquidity, and results of operations;

● our ability to obtain and maintain warehouse and other loan funding arrangements;

● our ability to make future dividend payments or repurchase shares of our common stock;

● availability of and our ability to attract and retain qualified personnel and our ability to develop and retain relationships with borrowers, key principals, and lenders;

● degree and nature of our competition;

● changes in governmental regulations, policies, and programs, tax laws and rates, and similar matters and the impact of such regulations, policies, and actions;

● our ability to comply with the laws, rules, and regulations applicable to us, including additional regulatory requirements for broker-dealer and other financial services firms;

● our ability to successfully integrate Alliant’s and GeoPhy’s (each as defined below) employees and operations;

● trends in the commercial real estate finance market, commercial real estate values, the credit and capital markets, or the general economy, including demand for multifamily housing and rent growth;

● general volatility of the capital markets and the market price of our common stock; and

● other risks and uncertainties associated with our business described in our 2021 Form 10-K and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission.

While forward-looking statements reflect our good-faith projections, assumptions, and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying

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assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. For a further discussion of these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements, see “Risk Factors.”

Business

Overview

We are a leading commercial real estate (i) services, (ii) finance, and (iii) technology company in the United States. Through strategic investments in people, brand, and technology, we have built a diversified suite of commercial real estate services to meet the needs of our customers. Our services include (i) multifamily lending, property sales, appraisal, valuation, and research, (ii) commercial real estate debt brokerage and advisory, (iii) investment management, and (iv) affordable housing lending, development, and investment. We leverage our technological resources and investments to (i) provide an enhanced experience for our customers, (ii) identify refinancing and other financial and investment opportunities for new and existing customers, and (iii) drive efficiencies in our internal processes. We believe our people, brand, and technology provide us with a competitive advantage, as evidenced by new loans to us representing 68% of refinancing volumes and 25% of total transaction volumes coming from new customers in the quarter.

We are one of the largest lenders to multifamily properties and commercial real estate in the country. We originate, sell, and service a range of multifamily and other commercial real estate financing products, including loans through the programs of the GSEs, and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”) (collectively, the “Agencies”). We retain servicing rights and asset management responsibilities on substantially all loans that we originate for the Agencies’ programs. We broker, and occasionally 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 provide multifamily property sales brokerage and appraisal and valuation services and engage in commercial real estate investment management activities, including a focus on the affordable housing sector through low-income housing tax credit (“LIHTC”) syndication. 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 provides our clients and us with market insight into many areas of the housing market. Our clients are owners and developers of multifamily properties and other commercial real estate assets across the country, some of whom are the largest owners and developers in the industry. We also underwrite, service, and asset-manage shorter term loans on commercial real estate. Most of these shorter-term interim loans are closed through a joint venture or through separate accounts managed by our investment management subsidiary, Walker & Dunlop Investment Partners, Inc. (“WDIP”). Some of these interim loans are closed and retained by us through our Interim Program JV or Interim Loan Program (as defined below in Principal Lending and Investing). We are a leader in commercial real estate technology, developing and acquiring technology resources that (i) provide innovative solutions and a better experience for our customers and (ii) allow us to reach a broader customer base.

On February 28, 2022, we acquired GeoPhy B.V. (“GeoPhy”), a leading commercial real estate technology company based in the Netherlands. We plan to use GeoPhy’s data analytics and technology development capabilities to accelerate the growth of our small-balance lending platform and our technology-enabled appraisal and valuation platform, Apprise.  

Walker & Dunlop, Inc. is a holding company. We conduct the majority of our operations through Walker & Dunlop, LLC, our operating company.

Segments

In the first quarter of 2022, as a result of the Company’s growth and recent acquisitions, our executive leadership team, which functions as our chief operating decision making body, began making decisions and assessing performance based on the following three operating segments: (i) Capital Markets (“CM”), (ii) Servicing & Asset Management (“SAM”), and (iii) Corporate. The operating segments are determined based on the product or service provided and reflect the manner in which management is currently evaluating the Company’s financial information. The CM and SAM segments and related services are described in the following paragraphs.

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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. The major other corporate-level functions include our strategic equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups.

Capital Markets

Capital Markets provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, and appraisal and valuation services. 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. The primary services within CM are described below.

Agency Lending

We are one of the leading lenders with the Agencies, where we originate and sell multifamily, manufactured housing communities, student housing, affordable housing, seniors housing, and small-balance multifamily loans. For additional information on our Agency Lending services, refer to Item 1. Business in our 2021 Form 10-K.

We recognize loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net from our lending with the Agencies when we commit to both originate a loan with a borrower and sell that loan to an investor. 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. Proceeds from the sale of the loan are used to pay off the warehouse facility borrowing. The sale of the loan is typically completed within 60 days after the loan is closed. 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.

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. 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. Any potential loss from a catastrophic change in the property condition while the loan is held for sale using warehouse facility financing is mitigated through property insurance equal to replacement cost. We are also protected contractually from an investor’s failure to purchase the loan. 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. In support of this product, we acquired a small technology company during the second quarter of 2021, that had a technology platform that streamlines and accelerates the quoting, processing, and underwriting of small-balance, multifamily loans. Additionally, the technology platform provides the borrower with a web-based, user-friendly interface, enhancing the borrower’s experience during the origination process. To further this strategy, we acquired GeoPhy during the first quarter of 2022, a leading commercial real estate technology company based in the Netherlands, to support our small-balance lending platform with data analytics and to further advance our technology development capabilities in this area.

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Debt Brokerage

Our mortgage bankers who focus on debt brokerage are engaged by borrowers to work with a variety of institutional lenders and banks to find the most appropriate loan instrument for the borrowers’ needs. These loans are then funded directly by the lender, and we receive an origination fee for placing the loan.

Property Sales

We offer property sales brokerage services to owners and developers of multifamily properties that are seeking to sell these properties through our subsidiary Walker & Dunlop Investment Sales, LLC (“WDIS”). 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. 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. Our property sales services are offered across the United States. 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.

Appraisal and Valuation Services

We offer multifamily appraisal and valuation services though our subsidiary Apprise by Walker & Dunlop (“Apprise”). Apprise leverages technology and data science to dramatically improve the consistency, transparency, and speed of multifamily property appraisals in the U.S. through our proprietary technology and leveraging our expertise in the commercial real estate industry. 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. Apprise’s revenues continue to rapidly grow, with significant increases in the volume of appraisal reports generated and a client list that includes several national commercial real estate lenders.

Servicing & Asset Management

Servicing & Asset Management focuses on (i) servicing and asset-managing the portfolio of loans we originate and sell to the Agencies, we service for certain life insurance companies, and we originate through our principal lending and investing activities, (ii) managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate, and (iii) real estate-related investment banking and advisory services, including housing market research. 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 subscription fees for our housing related research, and we earn revenue through net interest income on the loans and the warehouse interest expense for loans held for investment. 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 interest income on escrow deposits held on behalf of borrowers, and from other ancillary fees relating to servicing the loans. Servicing fees, which are based on servicing fee rates set at the time an investor agrees to purchase the loan and on the unpaid principal balance of the loan, are generally paid monthly for the duration of the loan. Our Fannie Mae and Freddie Mac servicing arrangements generally provide for prepayment protection to us in the event of a voluntary prepayment. For loans serviced outside of Fannie Mae and 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. After advancing for four months, we may request reimbursement by Fannie Mae for the principal and interest advances, and Fannie Mae will reimburse us for these advances within 60 days of the request. Under the Ginnie Mae program, we are obligated to advance the principal and interest payments and guarantee fees until the HUD loan is brought current, fully paid or assigned to HUD. We are eligible to assign a loan to HUD once it is in default for 30 days. 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. For loans in default, we may repurchase those loans out of the Ginnie Mae security, at which time our advance requirements cease and we may then modify and resell the loan or assign the loan back to

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HUD and be reimbursed for our advances. We are not obligated to make advances on the loans we service under the Freddie Mac Optigo® program and our bank and life insurance company servicing agreements.

We have risk-sharing obligations on substantially all loans we originate under the Fannie Mae DUS program. 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). Our full risk-sharing is currently limited to loans up to $300 million, which equates to a maximum loss per loan of $60 million (such exposure would occur in the event that the underlying collateral is determined to be completely without value at the time of loss). For loans in excess of $300 million, we receive modified risk-sharing. We also may request modified risk-sharing at the time of origination on loans below $300 million, which reduces our potential risk-sharing losses from the levels described above if we do not believe that we are being fully compensated for the risks of the transaction. The full risk-sharing limit prior to June 30, 2021 was less than $300 million. Accordingly, loans originated prior to then may have been subject to modified risk-sharing at much 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. For brokered loans we also service, we collect ongoing servicing fees while those loans remain in our servicing portfolio. The servicing fees we typically earn on brokered loan transactions are substantially lower than the servicing fees we earn on Agency loans.

Principal Lending and Investing

Our principal lending and investing operation is composed of the loans held by the Interim Program JV and the Interim Loan Program as described below (collectively the “Interim Program”). Through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., we offer 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”). 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 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.

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 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. The ultimate goal of the Interim Loan Program is to provide permanent Agency financing on these transitional properties.

Affordable Housing and Other Commercial Real Estate-related Investment Management Services

We provide affordable housing investment management services through our subsidiary, Alliant Capital, Ltd and its affiliates (“Alliant”). Alliant 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. 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. Alliant 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. Additionally, Alliant earns a syndication fee from the LIHTC funds for the identification, organization, and acquisition of affordable housing projects that generate LIHTCs.

We invest, as the managing or non-managing member of joint ventures, with developers of affordable housing projects that generate LIHTCs. These joint ventures earn developer fees, operating cash and sale / refinance proceeds from the properties they develop, and we receive the portion of the economic benefits commensurate with its investment in the joint ventures. Additionally, Alliant 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. Through these preservation funds,

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Alliant may receive acquisition and asset management fees and will receive a portion of the operating cash and capital appreciation upon sale through a promote structure.

Through our subsidiary, Walker & Dunlop Investment Partners, 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. WDIP’s current assets under management (“AUM”) of $1.3 billion primarily consist of five sources: Fund III, Fund IV, Fund V, and Fund VI (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. 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.

Housing Market Research and Real Estate Investment Banking Services

We own a 75% interest in a subsidiary doing business as Zelman & Associates (“Zelman”). Zelman is a nationally recognized housing market research and investment banking firm that will enhance the information we provide to our clients and increase our access to high-quality market insight in many areas of the housing market, including construction trends, demographics, mortgage finance, and real estate technology and services. Zelman generates revenues through the sale of its housing market research data and related publications to banks, investment banks and other financial institutions, and through its offering of real estate-related investment banking and advisory services.

Basis of Presentation

The accompanying condensed consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries, and all intercompany transactions have been eliminated.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates based on certain judgments and assumptions that are inherently uncertain and affect reported amounts. The estimates and assumptions are based on historical experience and other factors management believes to be reasonable. 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. Additional information about our critical accounting estimates and other significant accounting policies are discussed in NOTE 2 of the consolidated financial statements in our 2021 Form 10-K.

Mortgage Servicing Rights (“MSRs”). MSRs are recorded at fair value at loan sale or upon purchase. The fair value at loan sale (“OMSR”) 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. The estimated net cash flows from servicing, which includes assumptions for discount rate, escrow earnings, prepayment speed, and servicing costs, are discounted at a rate that reflects the credit and liquidity risk of the OMSR over the estimated life of the underlying loan. The discount rates used throughout the periods presented for all OMSRs were between 8-14% and varied based on the loan type. The life of the underlying loan is estimated giving consideration to the prepayment provisions in the loan and assumptions about loan behaviors around those provisions. Our model for OMSRs 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 that are based on an escrow earnings rate assumption. We include a servicing cost assumption to account for our expected costs to service a loan. The servicing cost assumption has not had a material impact on the estimate. We record an individual OMSR asset (or liability) for each loan at loan sale. The fair value of MSRs acquired through a stand-alone servicing portfolio purchase (“PMSR”) is equal to the purchase price paid. For PMSRs, we record and amortize a portfolio-level MSR asset based on the estimated remaining life of the portfolio using the prepayment characteristics of the portfolio.

The assumptions used to estimate the fair value of capitalized OMSRs are developed internally and are periodically compared to assumptions used by other market participants. 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, including the significant assumption that most significantly impacts the estimate – the discount rate. We do not expect to see significant volatility in the assumptions for

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the foreseeable future. We actively monitor the assumptions used and make adjustments to those assumptions when market conditions change, or other factors indicate such adjustments are warranted. During the first quarter of 2021, we reduced the discount rate and escrow earnings rate assumptions for our OMSRs. We engage a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. Changes in our discount rate assumptions may materially impact the fair value of the MSRs (NOTE 3 of the condensed consolidated financial statements details the portfolio-level impact of a change in the discount rate).

For PMSRs, a constant rate of prepayments and defaults is included in the determination of the portfolio’s estimated life at purchase (and thus included as a component of the portfolio’s amortization). Accordingly, prepayments and defaults of individual loans do not change the level of amortization expense recorded for the portfolio unless the pattern of actual prepayments and defaults varies significantly from the estimated pattern. When such a significant difference in the pattern of estimated and actual prepayments and defaults occurs, we prospectively adjust the estimated life of the portfolio (and thus future amortization) to approximate the actual pattern observed. We have made adjustments to the estimated life of our PMSRs in the past when the actual experience of prepayments differed materially from the estimated prepayments.

Allowance for Risk-Sharing Obligations. This reserve liability (referred to as “allowance”) for risk-sharing obligations relates to our Fannie Mae at-risk servicing portfolio and is presented as a separate liability on our balance sheets. We record an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio using the weighted-average remaining maturity method (“WARM”). WARM uses an average annual loss rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The average annual loss rate is applied to the estimated unpaid principal balance over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. We currently use one year for our reasonable and supportable forecast period (“forecast period”) as we believe forecasts beyond one year are inherently less reliable. During the forecast period, we apply an adjusted loss factor based on loss rates from a historical period that we believe is similar. We revert to the historical loss rate over a one-year period on a straight-line basis. Over the past couple of years, the loss rate used in the forecast period has been updated to reflect our expectations of the economic conditions over the coming year in relation to the historical period. For example, in the second quarter of 2022, we updated the loss rate used in the forecast period from three basis points to 2.2 basis points. Changes in the loss rate used in the forecast period have significantly impacted the estimate in the past.

One of the key components of a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will amortize and prepay in the future based on our historical prepayment and amortization experience. We group loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. 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. 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 rolling 10-year look-back period, utilizing the average portfolio balance and settled losses for each year. A 10-year period is used as we believe that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. 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. For example, in the first quarter of 2022, loss data from earlier periods in the look-back period fell off and were replaced with more recent loss data, resulting in the weighted-average annual loss rate changing from 1.8 basis points to 1.2 basis points. Changes in our expectations and forecasts have materially impacted, and in the future may materially impact, the estimate. We have not had a loss settlement in nearly six years.

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. 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. Loss settlement with Fannie Mae has historically concluded within 18 to 36 months after foreclosure. Historically, the initial collateral-based reserves have not varied significantly from the final settlement.

We actively monitor the judgments and assumptions used in our Allowance for Risk-Sharing Obligations estimate and make adjustments to those assumptions when market conditions change, or when other factors indicate such adjustments are warranted. We believe the level of

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Allowance for Risk-Sharing Obligations is appropriate based on our expectations of future market conditions; however, changes in one or more of the judgments or assumptions used above could have a significant impact on the estimate.  

Contingent Consideration Liabilities. The Company typically includes an earnout as part of the consideration paid for acquisitions to align the long-term interests of the acquiree with the Company. These earnouts contain milestones for achievement, which typically are revenue, revenue-like, or productivity measurements. If the milestone is achieved, the acquiree is paid the additional consideration. Upon acquisition, the Company is required to estimate the fair value of the earnout and include that fair value measurement as a component of the total consideration paid in the calculation of goodwill. The fair value of the earnout is recorded as a contingent consideration liability and included within Other liabilities in the Condensed Consolidated Balance Sheets. We are also required to continue to record the contingent consideration at fair value at 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. A Monte Carlo simulation analysis is used to determine many iterations of potential fair values. The average of these iterations is then used to determine the estimated fair value. We typically obtain the assistance of third-party valuation specialists to assist with the fair value estimation. The probability of the earn-out achievement is based on management’s estimate of the expected future performance and other financial metrics of each of the acquired entities, which are subject to significant uncertainty.

Over the past year, we have made two large acquisitions that included significant portions of contingent consideration. The aggregate fair value of our contingent consideration liabilities as of June 30, 2022 was $218.2 million. This fair value represents management’s best estimate of the discounted cash payments that will be made in the future for all of our contingent consideration arrangements. The maximum remaining undiscounted earnout payments as of June 30, 2022 was $323.8 million. Historically, all of the contingent consideration arrangements have paid out at the maximum achievable amount. We are uncertain whether this trend will continue in the future. Additionally, the earnouts completed prior to 2021 have involved businesses that operated in our core debt financing business and involved substantially smaller amounts of contingent consideration as compared to the two recent acquisitions.

Goodwill. As of June 30, 2022 and December 31, 2021, we reported goodwill of $937.9 million and $698.6 million, respectively. Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is assigned to the segment to which the acquisition relates. Goodwill is recognized as an asset and is reviewed for impairment annually in the fourth quarter. Between the annual evaluation time, we will perform an evaluation of recoverability, when events and circumstances indicate that it is more-likely-than not that the fair value of a reporting unit is below its carrying value. Impairment testing requires an assessment of qualitative factors to determine if there are indicators of potential impairment, followed by, if necessary, an assessment of quantitative factors. These factors include, but are not limited to, whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or significant or adverse changes in cash flow projections or earnings forecasts. These assessments require management to make judgements, assumptions, and estimates about projected cash flows, discount rates and other factors. As of June 30, 2022, we continue to believe our goodwill is not impaired.

Overview of Current Business Environment

The fundamentals of the commercial real estate market remained strong through the first half of 2022, particularly multifamily, which is the vast majority of our transaction volumes. Over the past two years, multifamily property fundamentals showed strength, with multifamily occupancy rates, demand for new leases, and retention rates at record highs. According to RealPage, a provider of commercial real estate data and analytics, overall vacancy rates remain historically low at 3.7%. Overall demand for multifamily rental units, coupled with a lack of supply has resulted in double-digit rent growth in most markets during the first half of 2022. Robust rent growth in the first half of 2022 for both new leases and renewals has helped offset the impacts of inflation on multifamily properties. Low vacancy rates and stabilizing rent growth still indicate a healthy multifamily market.

Macroeconomic conditions impacting multifamily markets remained stable in the second quarter of 2022, with the national unemployment rate falling to pre-pandemic lows of 3.6% as of June 2022. The high rate of inflation during the first half of 2022 resulted in the Federal Reserve increasing its target Federal Funds Rate by 1.50% from December 2021, with a target range of 1.50% to 1.75% as of June 30, 2022, with an additional 0.75% increase to 2.25% to 2.50% following its July 2022 meeting. The Federal Reserve continues to signal that it anticipates additional increases in the target range and will continue the reduction of its holdings in Treasury securities and Agency mortgage-backed securities (“Agency MBS”) until the inflation rate returns to the Federal Reserve’s long-term target. Both of these actions by the Federal

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Reserve have resulted in an increase in long-term mortgage interest rates, which form the basis of most of our lending.

The market’s transition from a historically low interest rate environment to a rising interest rate environment disrupted certain sectors of the lending market, with the most acute impact felt in the consumer lending sector (e.g., residential mortgages, auto lending, consumer credit, etc). Although volatility in long-term interest rates also disrupted certain segments of the commercial real estate lending environment at times during the first half of 2022, the commercial real estate debt and property sales markets remained active. As a result, our total transaction volumes increased 56% over the first half of 2021, with the largest increases in multifamily property sales (141%), debt brokerage (41%), and Fannie Mae (72%) volumes. The product we offer that was most significantly impacted by rising interest rates was our HUD product, which declined 54% when compared to the first half of 2021. As the Federal Reserve continues to combat inflation by increasing interest rates, we expect commercial real estate debt and property sales transaction activity to slow down from second quarter peaks, but still remain quite active overall. As with the first half of 2022, we expect certain products to be impacted more than others, with debt brokerage executions in non-multifamily assets classes being impacted the most, as banks and life insurance companies pull back and potentially increase capital reserves in the second half of 2022. However, we anticipate Agency lending volumes to accelerate in the second half of 2022. As the broader capital markets tighten, the Agencies historically step in to provide liquidity to the multifamily borrowing community as they did throughout 2020 and the second half of last year, and as one of the largest providers of capital to the multifamily sector, we are well positioned. As interest rates increased over the last several months, we have experienced declines in credit spreads to offset a portion of the interest rate increases. Although our lending activity with the Agencies may remain strong in the second half of 2022, the servicing fees and associated profitability of those executions may decline.

We are a market-leading originator with the Agencies, and we believe our market leadership positions us well to continue gaining market share and remain a significant lender with the Agencies for the foreseeable future.

The FHFA establishes loan origination caps for both Fannie Mae and Freddie Mac each year. In October 2021, the FHFA established Fannie Mae’s and Freddie Mac’s 2022 loan origination caps at $78 billion each for all multifamily business. During the three months ended June 30, 2022, Fannie Mae and Freddie Mac had multifamily origination volumes of $18.7 billion and $14.7 billion, respectively, up 71.6% and 12.2%, respectively, from the same period in 2021. During the six months ended June 30, 2022, Fannie Mae and Freddie Mac had multifamily origination volumes of $34.7 billion and $29.6 billion, respectively, up 7.1% and 9.2% from the first half of 2021, respectively, leaving a combined $91.7 billion of available lending capacity for the remainder of the year, or 43% more lending volume than the GSEs delivered to the multifamily market in the first half of 2022.

As part of FHFA’s 2022 loan origination caps, at least 50% of the GSEs’ multifamily business is required to be targeted towards affordable housing. Additionally, in 2021 the FHFA raised the GSEs’ combined LIHTC investment cap to $1.7 billion, up 70% from the previous cap of $1.0 billion. We intend to leverage our affordable debt financing and our newly acquired LIHTC syndication platforms to create additional growth opportunities for our debt financing, property sales, and LIHTC syndication platforms.

As noted above, our debt financing operations with HUD declined during the first half of 2022. HUD loan volumes accounted for 1.4% and 2.5% of our total debt financing volumes for the three and six months ended June 30, 2022, respectively, compared to 6.8% and 7.5% for the three and six months ended June 30, 2021, respectively. The decline in HUD debt financing volumes as a percentage of our total debt financing volumes was driven by a combination of higher HUD debt financing volumes in the first half of 2021 and the increasing interest-rate environment discussed above.  

Our originations with the Agencies are our most profitable executions as they provide significant non-cash gains from MSRs that turn into significant cash revenue streams from future servicing fees. During the three and six months ended June 30, 2022, servicing fees were up 7.5% and 8.8%, respectively, compared to the same periods in 2021, due to the growth in our Agency servicing portfolio over the last year. A decline in our Agency originations would negatively impact our financial results as our non-cash revenues would decrease disproportionately with debt financing volume and future servicing fee revenue would be constrained or decline.

Our multifamily property sales volumes continued to grow significantly in 2022, as (i) the multifamily acquisitions market continues to be very active and (ii) we continue to expand the number of property sales brokers and geographical reach of our property sales platform. Long term, we believe the market fundamentals will continue to be positive for multifamily property sales. Over the last several years, and throughout the pandemic, household formation and a dearth of supply of entry-level single-family homes led to strong demand for rental housing in most geographic areas. Consequently, the fundamentals of the multifamily property sales market were strong prior to the pandemic, and, when combined with low vacancies, rent growth and rising real-estate prices, it is our expectation that market demand for multifamily property sales will continue to grow as this asset class remains an attractive investment option.

Our debt brokerage platform continued its growth from 2021, with brokered volume increasing during the year. The increase in volume

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in 2022 reflects the continued demand from private capital providers, with activity focused not only on multifamily but also on other commercial real estate assets such as office, retail, and hospitality. Although lending activity in the non-multifamily asset classes may slow in the short-term, we expect non-multifamily debt financing volumes to continue to remain attractive in the long-term as other commercial real estate asset classes stabilize post-pandemic.

We entered into the Interim Program JV to expand our capacity to originate Interim Program loans beyond the use of our own balance sheet. The demand for transitional lending has brought increased competition from lenders, specifically banks, private debt funds, mortgage real estate investment trusts, and life insurance companies. For the six months ended June 30, 2022, we originated $86.3 million of Interim Program JV loans, compared to $351.0 million of originations for the same period last year. Except for one loan that defaulted in early 2019, the loans in our portfolio and in the Interim Program JV continue to perform as agreed.  

Consolidated Results of Operations

The following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2022 and 2021. The financial results are not necessarily indicative of future results. Our quarterly 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, industry trends, and general economic conditions. The table below provides supplemental data regarding our financial performance.

SUPPLEMENTAL OPERATING DATA

CONSOLIDATED

	For the three months ended						For the six months ended
	June 30,						June 30,
(dollars in thousands; except per share data)	2022			2021			2022			2021
Transaction Volume:
Total Debt Financing Volume	$	14,650,958		$	10,186,684		$	23,785,975		$	17,835,303
Property Sales Volume		7,892,062			3,341,532			11,423,752			4,737,292
Total Transaction Volume	$	22,543,020		$	13,528,216		$	35,209,727		$	22,572,595
Key Performance Metrics:
Operating margin		22	%		26	%		25	%		29	%
Return on equity		14			18			16			19
Walker & Dunlop net income	$	54,286		$	56,058		$	125,495		$	114,110
Adjusted EBITDA(1)		94,844			66,514			157,480			127,181
Diluted EPS		1.61			1.73			3.73			3.52
Key Expense Metrics (as a percentage of total revenues):
Personnel expenses		49	%		50	%		47	%		47	%
Other operating expenses		11			7			10			7

	As of June 30,
Managed Portfolio:	2022		2021
Total Servicing Portfolio	$	119,021,507	$	112,276,582
Assets under management		16,692,556		1,801,577
Total Managed Portfolio	$	135,714,063	$	114,078,159

(1) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measures.”

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The following tables present period-to-period comparisons of our financial results for the three and six months ended June 30, 2022 and 2021.

FINANCIAL RESULTS – THREE MONTHS

CONSOLIDATED

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	102,605	$	107,472	$	(4,867)	(5)	%
Fair value of expected net cash flows from servicing, net		51,949		61,849		(9,900)	(16)
Servicing fees		74,260		69,052		5,208	8
Property sales broker fees		46,386		22,454		23,932	107
Investment management fees		10,282		3,815		6,467	170
Net warehouse interest income		5,268		4,630		638	14
Escrow earnings and other interest income		6,751		1,823		4,928	270
Other revenues		43,347		10,316		33,031	320
Total revenues	$	340,848	$	281,411	$	59,437	21
Expenses
Personnel	$	168,368	$	141,421	$	26,947	19	%
Amortization and depreciation		61,103		48,510		12,593	26
Provision (benefit) for credit losses		(4,840)		(4,326)		(514)	12
Interest expense on corporate debt		6,412		1,760		4,652	264
Other operating expenses		36,195		19,748		16,447	83
Total expenses	$	267,238	$	207,113	$	60,125	29
Income from operations	$	73,610	$	74,298	$	(688)	(1)
Income tax expense		19,503		18,240		1,263	7
Net income before noncontrolling interests	$	54,107	$	56,058	$	(1,951)	(3)
Less: net income (loss) from noncontrolling interests		(179)		—		(179)	N/A
Walker & Dunlop net income	$	54,286	$	56,058	$	(1,772)	(3)

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FINANCIAL RESULTS – SIX MONTHS

CONSOLIDATED

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	184,915	$	183,351	$	1,564	1	%
Fair value of expected net cash flows from servicing, net		104,679		119,784		(15,105)	(13)
Servicing fees		146,941		135,030		11,911	9
Property sales broker fees		69,784		31,496		38,288	122
Investment management fees		22,930		6,551		16,379	250
Net warehouse interest income		10,041		9,185		856	9
Escrow earnings and other interest income		8,554		3,940		4,614	117
Other revenues		112,448		16,362		96,086	587
Total revenues	$	660,292	$	505,699	$	154,593	31
Expenses
Personnel	$	312,549	$	237,636	$	74,913	32	%
Amortization and depreciation		117,255		95,381		21,874	23
Provision (benefit) for credit losses		(14,338)		(15,646)		1,308	(8)
Interest expense on corporate debt		12,817		3,525		9,292	264
Other operating expenses		68,409		37,335		31,074	83
Total expenses	$	496,692	$	358,231	$	138,461	39
Income from operations	$	163,600	$	147,468	$	16,132	11
Income tax expense		38,963		33,358		5,605	17
Net income before noncontrolling interests	$	124,637	$	114,110	$	10,527	9
Less: net income (loss) from noncontrolling interests		(858)		—		(858)	N/A
Walker & Dunlop net income	$	125,495	$	114,110	$	11,385	10

Overview

Three months ended June 30, 2022 compared to three months ended June 30, 2021

The increase in revenues was primarily driven by increases in servicing fees, property sales broker fees, investment management fees, escrow earnings and other interest income, and other revenues, partially offset by decreases in loan origination and debt brokerage fees, net (“origination fees”) and the fair value of expected net cash flows from servicing, net (“MSR income”). Servicing fees increased largely from an increase in the average servicing portfolio outstanding. The increase in property sales broker fees was a result of a substantial increase in property sales volume. Investment management fees increased due to the addition of investment management fees from our LIHTC operations acquired in the fourth quarter of 2021. Escrow earnings and other interest income increased as a result of higher escrow earnings rate due to rising interest rates. Other revenues increased primarily as a result of increases in: (i) prepayment fees, (ii) other revenues from our LIHTC operations, and (iii) research subscription fees from a subsidiary acquired in the second half of 2021. The decreases in origination fees and MSR income this quarter were primarily related to a substantial decline in our HUD debt financing volume, partially offset by increases in other debt financing volumes. Additionally, during the second quarter of 2022, we closed a $1.9 billion portfolio of loans with Fannie Mae. Consistent with large portfolio transactions, the origination fee and servicing fee we earn as a percentage of the total transaction size was lower than our typical Fannie Mae originations.

Other revenues for the three months ended June 30, 2022 primarily consisted of the following: (i) $20.7 million in other revenues related to our LIHTC operations, (ii) $10.3 million of prepayment and application fees, (iii) $7.5 million of research subscription fees, and (iv) $4.8 million of miscellaneous revenues. Other revenues for the three months ended June 30, 2021 primarily consisted of (i) $7.2 million of prepayment and application fees and (ii) $3.4 million of assumption and other revenues.

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The increase in expenses was due to increases in most expense categories. The increase in personnel expenses was primarily a result of increases in commission costs due to the increase in property sales brokers fees and salaries and benefits costs driven by an increase in the average headcount. Amortization and depreciation expense increased primarily due to an increase in the average MSR balance and an increase in intangible asset amortization resulting from acquisitions over the past year. Interest expense on corporate debt increased primarily due to the increase in the size of the debt outstanding and the assumption of Alliant’s note payable in the fourth quarter of 2021. Other operating expenses increased largely as a result of (i) the overall growth of the Company over the past year including expenses from acquired subsidiaries and (ii) an increase in travel and entertainment costs compared to 2021 when our travel and entertainment expenses were depressed due to the on-going effects of the pandemic.  

Income Tax Expense. The increase in income tax expense relates primarily to an increase in the estimated annual effective tax rate due to a significant increase in nondeductible executive compensation and a $0.9 million decrease in realizable excess tax benefits, partially offset by a decrease in income from operations.  

Six months ended June 30, 2022 compared to six months ended June 30, 2021

The increase in revenues was primarily driven by increases in servicing fees, property sales broker fees, investment management fees, escrow earnings and other interest income, and other revenues, partially offset by a decrease in MSR income. Servicing fees increased largely from an increase in the average servicing portfolio outstanding. The increase in property sales broker fees was a result of a substantial increase in property sales volume. Investment management fees increased due to the addition of investment management fees from our LIHTC operations acquired in the fourth quarter of 2021. Escrow earnings and other interest income increased as a result of higher escrow earnings rates due to rising interest rates. Other revenues increased primarily as a result of increases in: (i) a one-time gain from the revaluation of our previously held equity-method investment in Apprise (“Apprise revaluation gain”), (ii) prepayment fees, (iii) other revenues from our LIHTC operations, and (iv) research subscription fees from a subsidiary acquired in the second half of 2021. MSR Income decreased primarily as a result of a significant decrease in HUD debt financing volumes.

Other revenues for the six months ended June 30, 2022 primarily consisted of the following: (i) $39.6 million of Apprise revaluation gain (as defined above), (ii) $19.9 million of prepayment and application fees, (iii) $28.5 million in other revenues related to our LIHTC operations, iv) $12.0 million of research subscription fees, and (v) $12.4 million of miscellaneous revenues. Other revenues for the six months ended June 30, 2021 primarily consisted of (i) $12.0 million of prepayment and application fees and (ii) $4.4 million of miscellaneous revenue.

The increase in expenses was due to increases in all expense categories. The increase in personnel expenses was primarily a result of increases in commission costs due to the increase in property sales brokers fees and salaries and benefits costs driven by an increase in the average headcount. Amortization and depreciation expense increased primarily due to an increase in the average MSR balance and an increase in intangible asset amortization resulting from acquisitions over the past year. Interest expense on corporate debt largely increased due to the increase in the size of the debt outstanding and the assumption of Alliant’s note payable the fourth quarter of 2021. Other operating expenses increased largely as a result of (i) the overall growth of the Company over the past year including expenses from acquired subsidiaries and (ii) an increase in travel and entertainment costs compared to 2021 when our travel and entertainment expenses were depressed due to the on-going effects of the pandemic.  

Income Tax Expense. The increase in income tax expense relates primarily to the 11% increase in income from operations and an increase in the estimated annual effective tax rate due to a significant increase in nondeductible executive compensation.

We do not expect our annual estimated effective tax rate to differ significantly from the 27.2% rate estimated for the three and six months ended June 30, 2022. Accordingly, we expect an estimated effective tax rate of between approximately 26.5% and 27.5% for the remainder of the year. The effective tax rate increased year over year from 22.6% in 2021 to 23.8% in 2022 due to the factors noted above.

A discussion of the financial results for our segments is included further below.  

Non-GAAP Financial Measure

To supplement our financial statements presented in accordance with GAAP, we use adjusted EBITDA, a non-GAAP financial measure. The presentation of adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. When analyzing our operating performance, readers should use adjusted EBITDA in addition

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to, and not as an alternative for, net income. Adjusted EBITDA represents net income before income taxes, interest expense on our term loan and Alliant’s note payable, and amortization and depreciation, adjusted for provision (benefit) for credit losses net of write-offs, stock-based incentive compensation charges, the fair value of expected net cash flows from servicing, net, and the gain from revaluation of a previously held equity-method investment. Because not all companies use identical calculations, our presentation of adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, adjusted EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not reflect certain cash requirements such as tax and debt service payments. The amounts shown for adjusted EBITDA may also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges that are used to determine compliance with financial covenants.

We use adjusted EBITDA to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. We believe that this non-GAAP measure, when read in conjunction with our GAAP financials, provides useful information to investors by offering:

● the ability to make more meaningful period-to-period comparisons of our ongoing operating results;

● the ability to better identify trends in our underlying business and perform related trend analyses; and

● a better understanding of how management plans and measures our underlying business.

We believe that adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that adjusted EBITDA should only be used to evaluate our results of operations in conjunction with net income on both a consolidated and segment basis. Adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CONSOLIDATED

	For the three months ended				For the six months ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Reconciliation of Walker & Dunlop Net Income to Adjusted EBITDA
Walker & Dunlop Net Income	$	54,286	$	56,058	$	125,495	$	114,110
Income tax expense		19,503		18,240		38,963		33,358
Interest expense on corporate debt		6,412		1,760		12,817		3,525
Amortization and depreciation		61,103		48,510		117,255		95,381
Provision (benefit) for credit losses		(4,840)		(4,326)		(14,338)		(15,646)
Net write-offs		—		—		—		—
Share-based compensation expense		10,329		8,121		21,608		16,237
Gain from revaluation of previously held equity-method investment		—		—		(39,641)		—
Fair value of expected net cash flows from servicing, net		(51,949)		(61,849)		(104,679)		(119,784)
Adjusted EBITDA	$	94,844	$	66,514	$	157,480	$	127,181

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The following tables present period-to-period comparisons of the components of adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

ADJUSTED EBITDA – THREE MONTHS

CONSOLIDATED

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	102,605	$	107,472	$	(4,867)	(5)	%
Servicing fees		74,260		69,052		5,208	8
Property sales broker fees		46,386		22,454		23,932	107
Investment management fees		10,282		3,815		6,467	170
Net warehouse interest income		5,268		4,630		638	14
Escrow earnings and other interest income		6,751		1,823		4,928	270
Other revenues		43,526		10,316		33,210	322
Personnel		(158,039)		(133,300)		(24,739)	19
Net write-offs		—		—		—	N/A
Other operating expenses		(36,195)		(19,748)		(16,447)	83
Adjusted EBITDA	$	94,844	$	66,514	$	28,330	43

ADJUSTED EBITDA – SIX MONTHS

CONSOLIDATED

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	184,915	$	183,351	$	1,564	1	%
Servicing fees		146,941		135,030		11,911	9
Property sales broker fees		69,784		31,496		38,288	122
Investment management fees		22,930		6,551		16,379	250
Net warehouse interest income		10,041		9,185		856	9
Escrow earnings and other interest income		8,554		3,940		4,614	117
Other revenues		73,665		16,362		57,303	350
Personnel		(290,941)		(221,399)		(69,542)	31
Net write-offs		—		—		—	N/A
Other operating expenses		(68,409)		(37,335)		(31,074)	83
Adjusted EBITDA	$	157,480	$	127,181	$	30,299	24

Three and six months ended June 30, 2022 compared to three and six months ended June 30, 2021

Origination fees decreased for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 due to a significant decrease in HUD debt financing volume. For both the three and six months ended June 30, 2022, servicing fees increased due to growth in the average servicing portfolio period over period. For both the three and six months ended June 30, 2022, property sales broker fees increased as a result of the increases in property sales volumes. For both the three and six months ended June 30, 2022, investment management fees increased due to the addition of investment management fees from our LIHTC operations acquired in the fourth quarter of 2021. For both the three and six months ended June 30, 2022, escrow earnings and other interest income increased as a result of higher escrow earnings rate due to rising interest rates. For both the three and six months ended June 30, 2022, other revenues increased primarily due to increases in (i) prepayment and application fees and (ii) other revenues from our LIHTC operations and research subscription fees generated from our acquired subsidiaries in the second half of 2021. For both the three and six months ended June 30, 2022, the increases in personnel expense were primarily due to increased commission costs due to the increases in property sales broker fees and salaries and benefits resulting from growth in average headcount. For both the three and six months ended June 30, 2022, other operating expenses increased as a result of the overall growth of the Company over the past year, increased travel and entertainment costs, and increased costs from acquired companies.

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Financial Condition

Cash Flows from Operating Activities

Our cash flows from operating activities are generated from loan sales, servicing fees, escrow earnings, net warehouse interest income, property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan originations and operating costs. Our cash flows from operations are impacted by the fees generated by our loan originations, 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 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. We opportunistically invest cash for acquisitions and MSR portfolio purchases.

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. We also use warehouse facilities to assist in funding investments in tax credit equity before transferring them to a tax credit fund. We believe that our current warehouse loan facilities are adequate to meet our increasing loan origination needs. Historically, we have used a combination of long-term debt and cash on hand to fund large acquisitions. Additionally, we repurchase shares, pay cash dividends, make long-term debt principal payments, and repay short-term borrowings on a regular basis. We issue stock primarily for exercise of stock options (cash inflow) and for acquisitions (non-cash transactions).

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Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

The following table presents a period-to-period comparison of the significant components of cash flows for the six months ended June 30, 2022 and 2021.

SIGNIFICANT COMPONENTS OF CASH FLOWS

	For the six months ended June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Net cash provided by (used in) operating activities	$	853,869	$	759,342	$	94,527	12	%
Net cash provided by (used in) investing activities		(113,928)		75,411		(189,339)	(251)
Net cash provided by (used in) financing activities		(937,359)		(802,999)		(134,360)	17
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period ("Total cash")		195,762		389,756		(193,994)	(50)
Cash flows from (used in) operating activities
Net receipt (use) of cash for loan origination activity	$	832,200	$	731,775	$	100,425	14	%
Net cash provided by (used in) operating activities, excluding loan origination activity		21,669		27,567		(5,898)	(21)
Cash flows from (used in) investing activities
Purchases of pledged AFS securities	$	(46,395)	$	(2,000)	$	(44,395)	2,220	%
Proceeds from the prepayment/sale of pledged AFS securities		6,101		22,092		(15,991)	(72)
Purchase of equity-method investments		(12,029)		(3,248)		(8,781)	270
Acquisitions, net of cash received		(78,465)		(10,507)		(67,958)	647
Capital expenditures		(11,902)		(3,800)		(8,102)	213
Net payoff of (investment in) loans held for investment		22,443		89,566		(67,123)	(75)
Net distributions from (investments in) joint ventures		6,319		(16,692)		23,011	138
Cash flows from (used in) financing activities
Borrowings (repayments) of warehouse notes payable, net	$	(826,454)	$	(744,281)	$	(82,173)	11	%
Borrowings of interim warehouse notes payable		36,459		84,766		(48,307)	(57)
Repayments of interim warehouse notes payable		(26,000)		(34,174)		8,174	(24)
Repayments of notes payable		(21,244)		(1,490)		(19,754)	1,326
Payment of contingent consideration		(17,612)		—		(17,612)	N/A
Repurchase of common stock		(39,380)		(14,190)		(25,190)	178
Borrowings (repayments) of secured borrowings		—		(73,312)		73,312	(100)
Cash dividends paid		(40,143)		(32,122)		(8,021)	25

The increase in net cash provided by operating activities was driven primarily by loans originated and sold. 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. The increase in cash flows received in loan origination activities is primarily attributable to a net increase in sales (net cash received) outpacing originations by $832.2 million in 2022 compared to $731.8 million in 2021. Excluding cash used for the origination and sale of loans, cash flows provided by operating activities were $21.7 million in 2022, down from $27.6 million in 2021. The decrease is primarily the result of a $13.9 million higher use for other operating activities, net, and a $39.6 million increase in non-cash adjustments for the Apprise revaluation gain in 2022 with no comparable activity in 2021, partially offset by a $10.5 million increase in net income before noncontrolling interest and a $37.0 million net reduction in non-cash adjustments for MSRs and amortization and depreciation. The significant decrease in Total cash over the past year is largely attributable to acquisition activity, partially offset by an increase in our long-term debt.

The change from net cash provided by investing activities in 2021 to net cash used in investing activities in 2022 was due to (i) an increase in the cash used in acquisitions due to an increase in the size of the acquisition in 2022 compared to 2021, (ii) a decrease in the net payoff of loans held for investment, (iii) a decrease in the payoff of pledged AFS securities, which is unpredictable, (iv) an increase in capital expenditures due to the build out of our new corporate headquarters, (v) an increase in the purchase of equity-method investments as capital calls for capital commitments increased year over year, and (vi) an increase in the purchase of AFS securities, partially offset by the change from net investments in joint ventures to net distributions from joint ventures. In the first half of 2021, we had two small acquisitions compared to the GeoPhy acquisition, which was substantially larger, resulting in an increase in cash used for acquisitions. Net payoff of loans held for

48

investment decreased, as there were fewer payoffs and originations in 2022 than in 2021. Our purchases of AFS securities increased in 2022, as we reinvested the funds from the payoff of AFS securities that occurred late in 2021.

The increase in cash used in financing activities was attributable to increases in: (i) net warehouse repayments, (ii) repayments of notes payable, (iii) repurchases of common stock, (iv) dividends paid, and (v) cash payments of contingent consideration liabilities, partially offset by (a) a decrease in net borrowings of interim warehouse notes payables and (b) a decrease in repayments of secured borrowings. The increase in the net repayments of warehouse notes payable was due to the aforementioned increase in cash received for loan origination activity. The decrease in net cash borrowings of interim warehouse notes payable was primarily due to a reduction in borrowings as we had fewer originations in 2022. The increase in repayments of notes payable was due to the quarterly paydowns of a note payable at our subsidiary, Alliant. The Alliant note payable requires much more significant paydowns than our corporate debt. The increase in cash paid for repurchases of common stock was related to significant vesting events in our various share-based compensation plans and the $11.1 million repurchase of common stock through our 2022 stock repurchase program compared to no repurchases under the 2021 stock repurchase program. Cash dividends paid increased largely as a result of the increase in our dividend to $0.60 per share in 2022 compared to $0.50 per share in 2021.

Segment Results

The Company is managed based on our three operating segments: (i) Capital Markets, (ii) Servicing & Asset Management, and (iii) Corporate. The segment results below are intended to present each of the operating segments on a stand-alone basis.

Capital Markets

SUPPLEMENTAL OPERATING DATA

CAPITAL MARKETS

	For the three months ended						For the six months ended
	June 30,						June 30,
(in thousands; except per share data)	2022			2021			2022			2021
Transaction Volume:
Components of Debt Financing Volume
Fannie Mae	$	3,918,400		$	1,911,976		$	5,916,774		$	3,445,000
Freddie Mac		1,141,034			1,003,319			2,128,883			2,016,039
Ginnie Mae ̶ HUD		201,483			672,574			593,176			1,294,707
Brokered(1)		9,258,490			6,280,578			14,901,571			10,583,070
Total Debt Financing Volume	$	14,519,407		$	9,868,447		$	23,540,404		$	17,338,816
Property Sales Volume		7,892,062			3,341,532			11,423,752			4,737,292
Total Transaction Volume	$	22,411,469		$	13,209,979		$	34,964,156		$	22,076,108
Key Performance Metrics:
Adjusted EBITDA(2)	$	16,880		$	14,215		$	28,136		$	31,346
Operating Margin		31	%		37	%		33	%		42	%
Key Revenue Metrics (as a percentage of debt financing volume):
Origination related fees(3)		0.71	%		1.07	%		0.78	%		1.04	%
MSR income(4)		0.36			0.63			0.44			0.69
MSR income, as a percentage of Agency debt financing volume(4)		0.99			1.72			1.21			1.77

(1) Brokered transactions for life insurance companies, commercial banks, and other capital sources.

(2) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measures”.

(3) The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty obligations retained. Excludes the income and debt financing volume from Principal Lending and Investing.

(4) The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty obligations retained, as a percentage of Agency volume.

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FINANCIAL RESULTS – THREE MONTHS

CAPITAL MARKETS

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	102,085	$	105,583	$	(3,498)	(3)	%
Fair value of expected net cash flows from servicing, net		51,949		61,849		(9,900)	(16)
Property sales broker fees		46,386		22,454		23,932	107
Net warehouse interest income, loans held for sale		3,707		2,884		823	29
Other revenues		3,895		3,135		760	24
Total revenues	$	208,022	$	195,905	$	12,117	6
Expenses
Personnel	$	138,913	$	119,994	$	18,919	16	%
Amortization and depreciation		810		18		792	4,400
Other operating expenses		4,583		3,598		985	27
Total expenses	$	144,306	$	123,610	$	20,696	17
Income from operations	$	63,716	$	72,295	$	(8,579)	(12)
Income tax expense		16,476		17,739		(1,263)	(7)
Net income	$	47,240	$	54,556	$	(7,316)	(13)

FINANCIAL RESULTS – SIX MONTHS

CAPITAL MARKETS

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	183,908	$	180,878	$	3,030	2	%
Fair value of expected net cash flows from servicing, net		104,679		119,784		(15,105)	(13)
Property sales broker fees		69,784		31,496		38,288	122
Net warehouse interest income, loans held for sale		7,237		5,343		1,894	35
Other revenues		6,658		5,695		963	17
Total revenues	$	372,266	$	343,196	$	29,070	8
Expenses
Personnel	$	237,639	$	192,629	$	45,010	23	%
Amortization and depreciation		810		539		271	50
Other operating expenses		10,694		7,000		3,694	53
Total expenses	$	249,143	$	200,168	$	48,975	24
Income from operations	$	123,123	$	143,028	$	(19,905)	(14)
Income tax expense		29,323		32,354		(3,031)	(9)
Net income	$	93,800	$	110,674	$	(16,874)	(15)

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Revenues

Loan origination and debt brokerage fees, net (“origination fees”) and Fair value of expected net cash flows from servicing, net (“MSR Income”). The following tables provide additional information that helps explain changes in origination fees and MSR Income period over period:

	For the three months ended				For the six months ended
	June 30,				June 30,
Debt Financing Volume by Product Type	2022		2021		2022		2021
Fannie Mae	27	%	19	%	25	%	20	%
Freddie Mac	8		10		9		12
Ginnie Mae ̶ HUD	1		7		3		7
Brokered	64		64		63		61

	For the three months ended					For the six months ended
	June 30,					June 30,
Mortgage Banking Details (basis points)	2022			2021		2022			2021
Origination Fee Rate (1)		71			107		78			104
Basis Point Change		(36)					(26)
Percentage Change		(34)	%				(25)	%
MSR Rate (2)		36			63		44			69
Basis Point Change		(27)					(25)
Percentage Change		(43)	%				(36)	%
Agency MSR Rate (3)		99			172		121			177
Basis Point Change		(73)					(56)
Percentage Change		(42)	%				(32)	%

(1) Loan origination and debt brokerage fees, net as a percentage of total mortgage banking volume.

(2) MSR Income as a percentage of total debt financing volume, excluding the income and debt financing volume from principal lending and investing.

(3) MSR Income as a percentage of Agency debt financing volume.

For the three months ended June 30, 2022, the decrease in origination fees was the result of a 36-point decrease in our origination fee rate, partially offset by the increase in overall debt financing volume. The decline in the origination fee rate was largely due to the significant decline in HUD debt financing volume and the $1.9 billion Fannie Mae portfolio, which comprised just under 50% of our Fannie Mae debt financing volume for the quarter and had a very low origination fee rate. The portfolio was the primary driver of the 105% increase in our Fannie Mae debt financing volume and was 13% of our total debt financing volume for the quarter. Large portfolios such as the $1.9 billion Fannie Mae portfolio typically have small origination fee rate. HUD loans are our most profitable loan product.

For the six months ended June 30, 2022, the increase in origination fees was primarily due to an increase in overall debt financing volume, particularly the substantial growth in brokered and Fannie Mae debt financing volume. Our brokered loan volumes grew 40.8% year over year. Excluding the aforementioned large Fannie Mae portfolio, our Fannie Mae debt financing volumes grew 17.7% year over year. The increase in origination fees from the overall growth in debt financing volume was partially offset by a significant reduction in our HUD debt financing volume and an overall decrease in the origination fee rate for many of the same reasons discussed for the three months ended June 30, 2022.

The decrease in MSR income for the three months ended June 30, 2022 is attributable to the decrease in our MSR and Agency MSR Rates, partially offset by the increase in overall debt financing volume. The decline in the Agency MSR Rate was primarily the result of a 56% decrease in the weighted-average servicing fee (“WASF”) for Fannie Mae debt financing volume. The decline in the WASF was related to the $1.9 billion Fannie Mae portfolio, which had a very low servicing fee that is typical of such a portfolio, and a decline in the WASF for our non-portfolio Fannie Mae debt financing volume. Additionally, our HUD debt financing volume declined significantly in 2022. The decrease in the MSR Rate was the result of the decrease in the Agency MSR Rate coupled with an increase in our brokered debt financing volume.

For the six months ended June 30, 2022, the decrease in MSR income was due to a 32% decline in the Agency MSR Rate, partially offset by a 27.9% increase in Agency debt financing volume. The decrease in Agency MSR rate was the result of the large Fannie Mae portfolio originated in the second quarter of 2022 combined with a significant decline in HUD debt financing volume as HUD loans have the highest MSR rate of all our products. The impacts to the Agency MSR Rate discussed above for the three months ended June 30, 2022 also impacted the six months ended June 30, 2022.

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See the “Overview of Current Business Environment” section above for a detailed discussion of the factors driving the changes in debt financing volumes.

Property sales broker fees. For the three months and six months ended June 30, 2022, the increase in property sales broker fees was driven by significant increases in the property sales volumes year over year, partially offset by declines in the property sales broker fee margin. See the “Overview of Current Business Environment” section above for a detailed discussion of the factors driving the changes in property sales volumes.

Expenses

Personnel. For the three months ended June 30, 2022, the increase was primarily the result of (i) a $14.3 million increase in property sales commission costs due to higher property sales broker fees and (ii) a $7.0 million increase in salaries and benefits due to a higher average headcount due to (i) the GeoPhy acquisition and corresponding consolidation of Apprise and (ii) hiring initatives to increase the number of bankers and brokers, partially offset by decreases in (i) debt financing commissions due to lower origination fees and (ii) accrual for subjective bonuses.

For the six months ended June 30, 2022, the increase was primarily the result of (i) a $27.6 million increase in overall commission costs due to higher origination fees and property sales broker fees, (ii) an $11.5 million increase in salaries and benefits due to (i) the GeoPhy acquisition and corresponding consolidation of Apprise, (ii) hiring initatives to increase the number of bankers and brokers, and (iii) a $4.0 million net increase in bonuses due to the Company’s financial performance.

Other Operating Expenses. For the six months ended June 30, 2022, the increase primarily stemmed from a $3.9 million increase in travel and entertainment costs associated with the growth of the Company and increased travel costs as our bankers and brokers attended more in person meetings compared to 2021, partially offset by a slight decrease in other expenses.

Income Tax Expense. Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our CM segment is presented below. 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. CM adjusted EBITDA is reconciled to net income as follows:

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ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CAPITAL MARKETS

	For the three months ended				For the six months ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Reconciliation of Net Income to Adjusted EBITDA
Net Income	$	47,240	$	54,556	$	93,800	$	110,674
Income tax expense		16,476		17,739		29,323		32,354
Amortization and depreciation		810		18		810		539
Share-based compensation expense		4,303		3,751		8,882		7,563
Fair value of expected net cash flows from servicing, net		(51,949)		(61,849)		(104,679)		(119,784)
Adjusted EBITDA	$	16,880	$	14,215	$	28,136	$	31,346

The following tables present period-to-period comparisons of the components of CM adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

ADJUSTED EBITDA – THREE MONTHS

CAPITAL MARKETS

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	102,085	$	105,583	$	(3,498)	(3)	%
Property sales broker fees		46,386		22,454		23,932	107
Net warehouse interest income, loans held for sale		3,707		2,884		823	29
Other revenues		3,895		3,135		760	24
Personnel		(134,610)		(116,243)		(18,367)	16
Other operating expenses		(4,583)		(3,598)		(985)	27
Adjusted EBITDA	$	16,880	$	14,215	$	2,665	19

ADJUSTED EBITDA – SIX MONTHS

CAPITAL MARKETS

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	183,908	$	180,878	$	3,030	2	%
Property sales broker fees		69,784		31,496		38,288	122
Net warehouse interest income, loans held for sale		7,237		5,343		1,894	35
Other revenues		6,658		5,695		963	17
Personnel		(228,757)		(185,066)		(43,691)	24
Net write-offs		—		—		—	N/A
Other operating expenses		(10,694)		(7,000)		(3,694)	53
Adjusted EBITDA	$	28,136	$	31,346	$	(3,210)	(10)

Three months ended June 30, 2022 compared to three months ended June 30, 2021

Loan origination and debt brokerage fees, net decreased due to a decrease in our origination fee rate and decreases in our HUD debt financing volumes, partially offset by an increase in overall debt financing volume. Property sales broker fees increased as a result of the significant increases in property sales volumes, partially offset by a decrease in the property sales broker fee margin. The increase in personnel expense was primarily due to increased (i) commission costs due to the increase in property sales broker fees and (ii) salaries and benefits resulting from increases in average headcount from strategic acquisitions and hiring initiatives.

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Six months ended June 30, 2022 compared to six months ended June 30, 2021

Loan origination and debt brokerage fees, net increased due to increases in overall debt financing volumes, partially offset by reductions in our HUD debt financing volume. Property sales broker fees increased as a result of the significant increases in property sales volumes, partially offset by a decrease in the property sales broker fee margin. The increase in personnel expense was primarily due to increased (i) commission costs due to higher origination fees and property sales broker fees, (ii) salaries and benefits resulting from increases in average headcount from strategic acquisitions and hiring initiatives, and (iii) accruals for subjective bonuses due to the increase in the average headcount and the Company’s financial performance. Other operating expenses increased as a result of the increased travel and marketing costs.

Servicing & Asset Management

SUPPLEMENTAL OPERATING DATA

SERVICING & ASSET MANAGEMENT

(dollars in thousands)	As of June 30,
Managed Portfolio:	2022		2021
Components of Servicing Portfolio
Fannie Mae	$	57,122,414	$	51,077,660
Freddie Mac		36,886,666		37,887,969
Ginnie Mae - HUD		9,570,012		9,904,246
Brokered (1)		15,190,315		13,129,969
Principal Lending and Investing (2)		252,100		276,738
Total Servicing Portfolio	$	119,021,507	$	112,276,582
Assets under management		16,692,556		1,801,577
Total Managed Portfolio	$	135,714,063	$	114,078,159

	For the three months ended						For the six months ended
	June 30,						June 30,
Key Volume and Performance Metrics:	2022			2021			2022			2021
Principal Lending and Investing Origination Volume(3)	$	131,551		$	318,237		$	245,571		$	496,487
Adjusted EBITDA(4)		105,062			73,703			192,835			143,122
Operating Margin		38	%		35	%		37	%		40	%

	As of June 30,
Key Servicing Portfolio Metrics:	2022		2021
Custodial escrow account balance (in billions)	$	2.3	$	3.0
Weighted-average servicing fee rate (basis points)		24.9		24.5
Weighted-average remaining servicing portfolio term (years)		8.9		9.2

		As of June 30,
Components of assets under management (in thousands)	2022		2021
Alliant(5)	$	14,495,126	$	—
WDIP		1,298,143		1,172,045
Interim Program JV Managed Loans(6)		899,287		629,532
Total assets under management	$	16,692,556	$	1,801,577

(1) Brokered loans serviced primarily for life insurance companies.

(2) Consists of interim loans not managed for the Interim Program JV.

(3) For the three months ended June 30, 2022, includes $113.6 million from the Interim Loan Program and $17.9 million from WDIP separate accounts. For the six months ended June 30, 2022, includes $86.3 million from the Interim Program JV, $113.6 million from the Interim Loan Program  and $45.7 million from WDIP separate accounts. For the three months ended June 30, 2021, includes $206.5 million from the Interim Program JV, $95.7 million from the Interim Loan Program,

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and $16.0 million from WDIP separate accounts. For the six months ended June 30, 2021, includes $351.0 million from the Interim Program JV, $129.5 million from the Interim Loan Program and $16.0 million from WDIP separate accounts.

(4) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measures”.

(5) Alliant assets under management were acquired in December 2021.

(6) As of June 30, 2022 and 2021, only comprised of Interim Program JV managed loans.

FINANCIAL RESULTS – THREE MONTHS

SERVICING & ASSET MANAGEMENT

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	520	$	1,889	$	(1,369)	(72)	%
Servicing fees		74,260		69,052		5,208	8
Investment management fees		10,282		3,815		6,467	170
Net warehouse interest income, loans held for investment		1,561		1,746		(185)	(11)
Escrow earnings and other interest income		6,648		1,768		4,880	276
Other revenues		39,280		6,885		32,395	471
Total revenues	$	132,551	$	85,155	$	47,396	56
Expenses
Personnel	$	21,881	$	9,447	$	12,434	132	%
Amortization and depreciation		58,760		47,395		11,365	24
Provision (benefit) for credit losses		(4,840)		(4,326)		(514)	12
Other operating expenses		6,559		2,604		3,955	152
Total expenses	$	82,360	$	55,120	$	27,240	49
Income from operations	$	50,191	$	30,035	$	20,156	67
Income tax expense		12,850		7,475		5,375	72
Income before noncontrolling interests	$	37,341	$	22,560	$	14,781	66
Less: net income (loss) from noncontrolling interests		(179)		—		(179)	N/A
Net income	$	37,520	$	22,560	$	14,960	66

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FINANCIAL RESULTS – SIX MONTHS

SERVICING & ASSET MANAGEMENT

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	1,007	$	2,473	$	(1,466)	(59)	%
Servicing fees		146,941		135,030		11,911	9
Investment management fees		22,930		6,551		16,379	250
Net warehouse interest income, loans held for investment		2,804		3,842		(1,038)	(27)
Escrow earnings and other interest income		8,406		3,767		4,639	123
Other revenues		61,529		11,657		49,872	428
Total revenues	$	243,617	$	163,320	$	80,297	49
Expenses
Personnel	$	40,519	$	16,558	$	23,961	145	%
Amortization and depreciation		113,691		92,773		20,918	23
Provision (benefit) for credit losses		(14,338)		(15,646)		1,308	(8)
Other operating expenses		12,678		4,857		7,821	161
Total expenses	$	152,550	$	98,542	$	54,008	55
Income from operations	$	91,067	$	64,778	$	26,289	41
Income tax expense		21,689		14,653		7,036	48
Income before noncontrolling interests	$	69,378	$	50,125	$	19,253	38
Less: net income (loss) from noncontrolling interests		(858)		—		(858)	N/A
Net income	$	70,236	$	50,125	$	20,111	40

Revenues

Servicing Fees. For the three and six months ended June 30, 2022, the increase was primarily attributable to an increase in the average servicing portfolio period over period as shown below, primarily due to a $6.0 billion net increase in Fannie Mae serviced loans and a $2.1 billion net increase in brokered loans serviced over the past year, coupled with increases in the servicing portfolio’s average servicing fee rates as shown below. The increases in the average servicing fee rates are the result of the large volume of Fannie Mae debt financing volume over the past year.

	For the three months ended					For the six months ended
	June 30,					June 30,
Servicing Fees Details (dollars in thousands)	2022			2021		2022			2021
Average Servicing Portfolio	$	117,628,010		$	110,949,226	$	116,972,088		$	109,736,658
Dollar Change	$	6,678,784				$	7,235,430
Percentage Change		6	%				7	%
Average Servicing Fee (basis points)		24.9			24.4		24.9			24.3
Basis Point Change		0.5					0.6
Percentage Change		2	%				2	%

Investment Management Fees. For the three and six months ended June 30, 2022, the increases were primarily driven by the addition of investment management fees from our LIHTC operations that were acquired late in the fourth quarter of 2021, which added $7.9 million and $18.7 million in additional fees, respectively.

Escrow earnings and other interest income.  For the three and six months ended June 30, 2022, the increase was driven primarily by increases in our escrow earnings of $2.9 million and $3.7 million, respectively. The earnings rates on escrow earnings and other interest income increased as a result of rising interest rates over the past six months.

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Other Revenues. For the three months ended June 30, 2022, the increase was primarily attributable to: (i) a $20.7 million increase in other revenues from our LIHTC operations, (ii) a $7.5 million increase in research subscription fees, and (iii) a $3.5 million increase in prepayment penalties. For the six months ended June 30, 2022, the increase was primarily attributable to: (i) a $28.5 million increase in other revenues from our LIHTC operations, (ii) a $12.0 million increase in research subscription fees, and (iii) an $8.6 million increase in prepayment penalties. The increase in other revenues from LIHTC operations was driven by our subsidiary Alliant, and the research subscription fees increase was driven by Zelman, both of which were acquired in the second half of 2021. The increase in prepayment fees was due to a substantial increase in the volume of loans that prepaid year over year due to anticipated changes in the interest rate environment.

Expenses

Personnel. For the three and six months ended June 30, 2022, the increases were primarily the result of a $12.3 million increase and a $23.6 million increase, respectively, in salaries and benefits due to growth in headcount as a result of strategic acquisitions that occurred during the second half of 2021.

Amortization and Depreciation. For the three and six months ended June 30, 2022, the increases were primarily attributed to loan origination activity and the resulting growth in the average MSR balance and due to an increase in intangible asset amortization. Over the past 12 months, we have added $125.3 million of MSRs, net of disposals. Due to strategic investments over the past year, we have added $175.3 million in intangible assets to SAM, resulting in increases in amortization expense of $3.4 million and $6.8 million for the three and six months ended June 30, 2022, respectively.

Other Operating Expenses. For the three and six months ended June 30, 2022, the increases primarily stemmed from an increase in professional fees of $1.2 million and $2.4 million, respectively. Additionally, there were increases in other costs across all expense categories. The increases in professional fees and other costs primarily stemmed from additional operating expenses incurred at subsidiaries acquired in the second half of 2021.

Income Tax Expense. Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our SAM segment is presented below. 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. SAM adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

SERVICING & ASSET MANAGEMENT

	For the three months ended				For the six months ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Reconciliation of Net Income to Adjusted EBITDA
Net Income	$	37,520	$	22,560	$	70,236	$	50,125
Income tax expense		12,850		7,475		21,689		14,653
Amortization and depreciation		58,760		47,395		113,691		92,773
Provision (benefit) for credit losses		(4,840)		(4,326)		(14,338)		(15,646)
Net write-offs		—		—		—		—
Share-based compensation expense		772		599		1,557		1,217
Adjusted EBITDA	$	105,062	$	73,703	$	192,835	$	143,122

The following tables present period-to-period comparisons of the components of SAM adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

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ADJUSTED EBITDA – THREE MONTHS

SERVICING & ASSET MANAGEMENT

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	520	$	1,889	$	(1,369)	(72)	%
Servicing fees		74,260		69,052		5,208	8
Investment management fees		10,282		3,815		6,467	170
Net warehouse interest income, loans held for investment		1,561		1,746		(185)	(11)
Escrow earnings and other interest income		6,648		1,768		4,880	276
Other revenues		39,459		6,885		32,574	473
Personnel		(21,109)		(8,848)		(12,261)	139
Net write-offs		—		—		—	N/A
Other operating expenses		(6,559)		(2,604)		(3,955)	152
Adjusted EBITDA	$	105,062	$	73,703	$	31,359	43

ADJUSTED EBITDA – SIX MONTHS

SERVICING & ASSET MANAGEMENT

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Loan origination and debt brokerage fees, net	$	1,007	$	2,473	$	(1,466)	(59)	%
Servicing fees		146,941		135,030		11,911	9
Investment management fees		22,930		6,551		16,379	250
Net warehouse interest income, loans held for investment		2,804		3,842		(1,038)	(27)
Escrow earnings and other interest income		8,406		3,767		4,639	123
Other revenues		62,387		11,657		50,730	435
Personnel		(38,962)		(15,341)		(23,621)	154
Net write-offs		—		—		—	N/A
Other operating expenses		(12,678)		(4,857)		(7,821)	161
Adjusted EBITDA	$	192,835	$	143,122	$	49,713	35

Three and six months ended June 30, 2022 compared to three and six months ended June 30, 2021

Servicing fees increased due to growth in the average servicing portfolio period over period as a result of loan originations and an increase in the average servicing fee rate. Investment management fees increased due to the addition of our LIHTC operations. Other revenues increased primarily due to the addition of other revenues from our LIHTC operations and research subscription fees resulting from our acquisitions in the second of half of 2021 and an increase in prepayment penalties. Personnel and other operating expenses increased due to growth in headcount and operations from the aforementioned acquisitions.

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Corporate

FINANCIAL RESULTS – THREE MONTHS

CORPORATE

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Other interest income	$	103	$	55	$	48	87	%
Other revenues		172		296		(124)	(42)
Total revenues	$	275	$	351	$	(76)	(22)
Expenses
Personnel	$	7,574	$	11,980	$	(4,406)	(37)	%
Amortization and depreciation		1,533		1,097		436	40
Interest expense on corporate debt		6,412		1,760		4,652	264
Other operating expenses		25,053		13,546		11,507	85
Total expenses	$	40,572	$	28,383	$	12,189	43
Income from operations	$	(40,297)	$	(28,032)	$	(12,265)	44
Income tax expense		(9,823)		(6,974)		(2,849)	41
Net income	$	(30,474)	$	(21,058)	$	(9,416)	45
Adjusted EBITDA	$	(27,098)	$	(21,404)	$	(5,694)	27	%

FINANCIAL RESULTS – SIX MONTHS

CORPORATE

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Revenues
Other interest income	$	148	$	173	$	(25)	(14)	%
Other revenues		44,261		(990)		45,251	(4,571)
Total revenues	$	44,409	$	(817)	$	45,226	(5,536)
Expenses
Personnel	$	34,391	$	28,449	$	5,942	21	%
Amortization and depreciation		2,754		2,069		685	33
Interest expense on corporate debt		12,817		3,525		9,292	264
Other operating expenses		45,037		25,478		19,559	77
Total expenses	$	94,999	$	59,521	$	35,478	60
Income from operations	$	(50,590)	$	(60,338)	$	9,748	(16)
Income tax expense		(12,049)		(13,649)		1,600	(12)
Net income	$	(38,541)	$	(46,689)	$	8,148	(17)
Adjusted EBITDA	$	(63,491)	$	(47,287)	$	(16,204)	34	%

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Revenues

Other Revenues. For the six months ended June 30, 2022, the increase was primarily due to the $39.6 million Apprise revaluation gain, which was recognized in the first quarter fo 2022. As part of our acquisition of GeoPhy, we acquired its 50% interest in Apprise. The revaluation of our existing 50% ownership interest with a carrying value of $18.9 million to a fair value of $58.5 million resulted in a $39.6 million gain. The remaining increase was primarily due to a $4.6 million increase in income from our other equity-method investments, mostly related to the first quarter of 2022.  

Expenses

Personnel. For the three months ended June 30, 2022, the decrease was primarily the result of a $5.1 million decrease to the accrual for subjective bonuses and a $2.1 million decrease in compensation expense related to the Company’s deferred compensation plan, partially offset by a $1.2 million increase in salaries and benefits due to an increase in the average headcount and $1.5 million increase in stock compensation.

For the six months ended June 30, 2022, the increase was primarily the result of (i) a $4.8 million increase in salaries and benefits due to an increase in the average headcount and (ii) a $3.7 million increase in stock compensation expense, partially offset by a $2.5 million decrease in compensation expense related to the Company’s deferred compensation plan

Interest expense on corporate debt. For the three and six months ended June 30, 2022, the increases were driven by a doubling in the size of our corporate debt during the fourth quarter of 2021 and increases in interest expense related to a note payable at our subsidiary, Alliant, which we assumed in the fourth quarter of 2021.

Other Operating Expenses. For the three months ended June 30, 2022, the increase was primarily driven by: (i) a $6.5 million increase in office expenses, (ii) a $1.8 million increase in professional fees, and (iii) a $1.4 million increase in marketing costs. The increases in expenses were attributable to the growth of the Company, especially from acquired subsidiaries.

For the six months ended June 30, 2022, the increase was primarily driven by: (i) a $7.2 million increase in professional fees largely due to increases in legal and other professional fees related to our acquisitions and growth of the Company, (ii) a $7.5 million increase in office expenses related to the growth of the Company and acquired offices, (iii) a $1.8 million increase in travel and entertainment costs attributable to the growth of the Company and as travel and entertainment costs in 2021 were depressed due to the pandemic, and (iv) a $1.7 million increase in marketing costs related to the growth of the Company, especially from acquisition subsidiaries.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our Corporate segment is presented below. 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. Corporate adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CORPORATE

	For the three months ended				For the six months ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Reconciliation of Net Income to Adjusted EBITDA
Net Income	$	(30,474)	$	(21,058)	$	(38,541)	$	(46,689)
Income tax expense		(9,823)		(6,974)		(12,049)		(13,649)
Interest expense on corporate debt		6,412		1,760		12,817		3,525
Amortization and depreciation		1,533		1,097		2,754		2,069
Share-based compensation expense		5,254		3,771		11,169		7,457
Gain from revaluation of previously held equity-method investment		—		—		(39,641)		—
Adjusted EBITDA	$	(27,098)	$	(21,404)	$	(63,491)	$	(47,287)

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The following tables present period-to-period comparisons of the components of Corporate adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

ADJUSTED EBITDA – THREE MONTHS

CORPORATE

	For the three months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Other interest income		103		55		48	87	%
Other revenues		172		296		(124)	(42)
Personnel		(2,320)		(8,209)		5,889	(72)
Other operating expenses		(25,053)		(13,546)		(11,507)	85
Adjusted EBITDA	$	(27,098)	$	(21,404)	$	(5,694)	27

ADJUSTED EBITDA – SIX MONTHS

CORPORATE

	For the six months ended
	June 30,				Dollar		Percentage
(dollars in thousands)	2022		2021		Change		Change
Other interest income		148		173		(25)	(14)	%
Other revenues		4,620		(990)		5,610	(567)
Personnel		(23,222)		(20,992)		(2,230)	11
Other operating expenses		(45,037)		(25,478)		(19,559)	77
Adjusted EBITDA	$	(63,491)	$	(47,287)	$	(16,204)	34

Three months ended June 30, 2022 compared to three months ended June 30, 2021

The decrease in personnel expense was primarily due to the decreases in accruals for subjective bonuses and expenses related to the Company’s deferred compensation plan, partially offset by increased salaries and benefits resulting from increases in average headcount. Other operating expenses increased as a result of the overall growth of the Company over the past year and from increased professional costs associated with acquisitions.

Six months ended June 30, 2022 compared to six months ended June 30, 2021

Other revenues increased primarily due to our equity method investments generating income in 2022 compared to losses in 2021. The increase in personnel expense was primarily due to increased salaries and benefits resulting from increases in average headcount, partially offset by a decrease in deferred compensation costs. Other operating expenses increased as a result of the overall growth of the Company over the past year and from increased professional costs associated with acquisitions.

Liquidity and Capital Resources

Uses of Liquidity, Cash and Cash Equivalents

       Our significant recurring cash flow requirements consist of liquidity to (i) fund loans held for sale; (ii) fund loans held for investment under the Interim Loan Program; (iii) pay cash dividends; (iv) fund our portion of the equity necessary for the operations of the Interim Program JV, and other equity-method investments; (v) fund investments in properties to be syndicated to LIHTC investment funds that we will asset-manage; (vi) make payments related to earnouts from acquisitions, (vii) meet working capital needs to support our day-to-day operations, including debt service payments, joint venture development partnerships contributions, servicing advances and payments for salaries, commissions, and income taxes,; and (viii) meet working capital to satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and to meet the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.

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Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate our servicing authority for all or some of the portfolio if, at any time, it determines that our financial condition is not adequate to support our obligations under the DUS agreement. We are required to maintain acceptable net worth as defined in the standards, and we satisfied the requirements as of June 30, 2022. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk-sharing. As of June 30, 2022, the net worth requirement was $266.2 million, and our net worth was $621.6 million, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC. As of June 30, 2022, we were required to maintain at least $52.8 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 June 30, 2022, we had operational liquidity of $116.0 million, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC.

We paid a cash dividend of $0.60 per share for the second quarter of 2022, which is 20% higher than the quarterly dividend paid in the second quarter of 2021. On August 3, 2022, the Company’s Board of Directors declared a dividend of $0.60 per share for the third quarter of 2022. The dividend will be paid on September 2, 2022 to all holders of record of our restricted and unrestricted common stock as of August 18, 2022.

Over the past three years, we have returned $208.5 million to investors through the repurchase of 0.6 million shares of our common stock under share repurchase programs for a cost of $39.9 million and cash dividend payments of $168.6 million. Additionally, we have invested $649.1 million in acquisitions, $300.0 million of which was financed by an increase in our Term Debt. On occasion, we may use cash to fully fund some loans held for investment or loans held for sale instead of using our warehouse lines. As of June 30, 2022, we did not fully fund any such loans. We continually seek opportunities to complete additional acquisitions if we believe the economics are favorable.  

In February 2022, our Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning February 13, 2022. Through June 30, 2022 we have repurchased 109 thousand shares under the 2022 stock repurchase program and have $63.9 million of remaining capacity under that program.

Historically, our cash flows from operations and warehouse facilities have been sufficient to enable us to meet our short-term liquidity needs and other funding requirements. We believe that cash flows from operations will continue to be sufficient for us to meet our current obligations for the foreseeable future.

Restricted Cash and Pledged Securities

Restricted cash consists primarily of good faith deposits held on behalf of borrowers between the time we enter into a loan commitment with the borrower and the investor purchases the loan and cash held in collection accounts to be used to fund the repayment of the Alliant note payable. 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. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires collateral for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Collateral held in the form of money market funds holding U.S. Treasuries is discounted 5%, and Agency MBS are discounted 4% for purposes of calculating compliance with the collateral requirements. As of June 30, 2022, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $139.4 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans. We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital.

We are in compliance with the June 30, 2022 collateral requirements as outlined above. As of June 30, 2022, reserve requirements for the June 30, 2022 DUS loan portfolio will require us to fund $70.4 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae has assessed the DUS Capital Standards in the past and may make changes to these standards in the future. We generate sufficient cash flows from our operations to meet these capital standards and do not expect any future changes to have a material impact on our future operations; however, any future changes to collateral requirements may adversely impact our available cash.

Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and unrestricted portions of the required reserves each year. We satisfied these requirements as of June 30, 2022.

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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, Interim Loan Program, and LIHTC operations. Our ability to originate Agency mortgage loans and loans held for investments depends upon our ability to secure and maintain these types of financing agreements on acceptable terms.  For a detailed description of the terms of each warehouse agreement including the affirmative and negative covenants, refer to “Warehouse Facilities” in NOTE 6 in the consolidated financial statements in our 2021 Form 10-K, as updated in NOTE 6 in the condensed consolidated financial statements in this Form 10-Q.

Notes Payable

We have a senior secured credit agreement (the “Credit Agreement”) that provides for a $600 million term loan (the “Term Loan”) that bears interest at Adjusted Term SOFR plus 225 basis points with a floor of 50 basis points and has a stated maturity date of December 16, 2028 (or, if earlier, the date of acceleration of the Term Loan pursuant to the term of the Credit Agreement). At any time, we may also elect to request one or more incremental term loan commitments not to exceed the lesser of $230 million and 100% of trailing four-quarter Consolidated Adjusted EBITDA, provided that total indebtedness would not cause the leverage ratio to exceed 3.00 to 1.00. As of June 30, 2022, the outstanding principal balance of the Term Loan was $597.0 million. The note payable and the warehouse facilities are senior obligations of the Company. As of June 30, 2022, we were in compliance with all covenants related to the Credit Agreement.

For a detailed description of the terms of the Credit Agreement, refer to “Notes Payable – Term Loan Note Payable” in NOTE 6 in the consolidated financial statements in our 2021 Form 10-K. There have been no changes to the Credit Agreement in 2022.

We have a note payable through our wholly-owned subsidiary Alliant, which has an outstanding balance of $126.9 million as of June 30, 2022 and bears interest at a fixed rate of 4.75%. The note has a stated maturity of January 15, 2035 and requires quarterly payments of principal, interest, and other required priority items shortly after the beginning of each quarter as further detailed in “Notes Payable – Alliant Note Payable” in NOTE 6 in the consolidated financial statements in our 2021 Form 10-K. There have been no changes to the terms of the note payable during 2022.

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Credit Quality and Allowance for Risk-Sharing Obligations

The following table sets forth certain information useful in evaluating our credit performance.

	June 30,
(dollars in thousands)	2022			2021
Key Credit Metrics
Risk-sharing servicing portfolio:
Fannie Mae Full Risk	$	47,461,520		$	42,444,569
Fannie Mae Modified Risk		9,651,421			8,617,020
Freddie Mac Modified Risk		23,715			36,894
Total risk-sharing servicing portfolio	$	57,136,656		$	51,098,483
Non-risk-sharing servicing portfolio:
Fannie Mae No Risk	$	9,473		$	16,071
Freddie Mac No Risk		36,862,951			37,851,075
GNMA - HUD No Risk		9,570,012			9,904,246
Brokered		15,190,315			13,129,969
Total non-risk-sharing servicing portfolio	$	61,632,751		$	60,901,361
Total loans serviced for others	$	118,769,407		$	111,999,844
Interim loans (full risk) servicing portfolio		252,100			276,738
Total servicing portfolio unpaid principal balance	$	119,021,507		$	112,276,582
Interim Program JV Managed Loans (1)		899,287			629,532
At risk servicing portfolio (2)	$	51,905,985		$	46,866,767
Maximum exposure to at risk portfolio (3)		10,525,093			9,517,609
Defaulted loans		78,659			48,481
Defaulted loans as a percentage of the at-risk portfolio		0.15	%		0.10	%
Allowance for risk-sharing as a percentage of the at-risk portfolio		0.09			0.13
Allowance for risk-sharing as a percentage of maximum exposure		0.46			0.63

(1) As of June 30, 2022 and 2021, this balance consists entirely of Interim Program JV managed loans. We indirectly share in a portion of the risk of loss associated with Interim Program JV managed loans through our 15% equity ownership in the Interim Program JV. We have no exposure to risk of loss for the loans serviced directly for the Interim Program JV partner. The balance of this line is included as a component of assets under management in the Supplemental Operating Data table above.

(2) At-risk servicing portfolio is defined as the balance of Fannie Mae DUS loans subject to the risk-sharing formula described below, as well as a small number of Freddie Mac loans on which we share in the risk of loss. 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.

For example, a $15 million loan with 50% risk-sharing has the same potential risk exposure as a $7.5 million loan with full DUS risk sharing. Accordingly, if the $15 million loan with 50% risk-sharing were to default, we would view the overall loss as a percentage of the at-risk balance, or $7.5 million, to ensure comparability between all risk-sharing obligations. To date, substantially all of the risk-sharing obligations that we have settled have been from full risk-sharing loans.

(3) Represents the maximum loss we would incur under our risk-sharing obligations if all of the loans we service, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. The maximum exposure is not representative of the actual loss we would incur.

Fannie Mae DUS risk-sharing obligations are based on a tiered formula and represent substantially all of our risk-sharing activities. The risk-sharing tiers and the amount of the risk-sharing obligations we absorb under full risk-sharing are provided below. 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 unpaid principal balance (“UPB”) of the loan.

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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. We may request modified risk-sharing at the time of origination, which reduces our potential risk-sharing obligation from the levels described above.

We use several techniques to manage our risk exposure under the Fannie Mae DUS risk-sharing program. These techniques include maintaining a strong underwriting and approval process, evaluating and modifying our underwriting criteria given the underlying multifamily housing market fundamentals, limiting our geographic market and borrower exposures, and electing the modified risk-sharing option under the Fannie Mae DUS program.

The “Business” section of “Item 2. 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. Loans with indicators of underperforming credit are placed on a watch list, assigned a numerical risk rating based on our assessment of the relative credit weakness, and subjected to additional evaluation or loss mitigation. Indicators of underperforming credit include poor financial performance, poor physical condition, poor management, and delinquency. 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.

The calculated CECL reserve for the Company’s $51.2 billion at-risk Fannie Mae servicing portfolio as of June 30, 2022 was $37.7 million compared to $52.3 million as of December 31, 2021. The significant decrease in the CECL reserve was principally related to a reduction in our historical loss factor used for both the three and six months ended June 30, 2022 and the forecast-period loss rate for the three months ended June 30, 2022.

As of June 30, 2022, three at-risk loans with an aggregate UPB of $78.7 million were in default compared to two loans with an aggregated UPB of $48.5 million as of June 30, 2021. The collateral-based reserve on defaulted loans was $10.8 million and $7.6 million as of June 30, 2022 and June 30, 2021, respectively. We had a benefit for risk-sharing obligations of $4.8 million for the three months ended June 30, 2022 compared to a benefit for risk-sharing obligations of $4.3 million for the three months ended June 30, 2021. We had a benefit for risk-sharing obligations of $14.2 million for the six months ended June 30, 2022 compared to a benefit for risk-sharing obligations of $15.0 million for the six months ended June 30, 2021.

We have never been required to repurchase a loan.

New/Recent Accounting Pronouncements

As seen in NOTE 2 in the condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q, there are no accounting pronouncements that the Financial Accounting Standards Board has issued and that have the potential to impact us but have not yet been adopted by us as of June 30, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

For loans held for sale to Fannie Mae, Freddie Mac, and HUD, we are not currently exposed to unhedged interest rate risk during the loan commitment, closing, and delivery processes. The sale or placement of each loan to an investor is negotiated prior to closing on the loan with the borrower, and the sale or placement is typically effectuated within 60 days of closing. The coupon rate for the loan is set at the same time we establish the interest rate with the investor.

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Some of our assets and liabilities are subject to changes in interest rates. Earnings from escrows generally track 30-day LIBOR. 30-day LIBOR as of June 30, 2022 and 2021 was 179 basis points and 10 basis points, respectively. The following table shows the impact on our annual escrow earnings due to a 100-basis point increase and decrease in 30-day LIBOR 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 30-day LIBOR would be delayed several months due to the negotiated nature of some of our escrow arrangements.

	As of June 30,
Change in annual escrow earnings due to: (in thousands)	2022		2021
100 basis point increase in 30-day LIBOR	$	23,499	$	30,204
100 basis point decrease in 30-day LIBOR(1)		(23,265)		(2,996)

The borrowing cost of our warehouse facilities used to fund loans held for sale, loans held for investment, and investments in tax credit equity is based on LIBOR or Adjusted Term Secured Overnight Financing Rate (“SOFR”). The base SOFR was 150 basis points as of June 30, 2022. The interest income on our loans held for investment is based on LIBOR or SOFR. The LIBOR or SOFR reset date for loans held for investment is the same date as the LIBOR or SOFR reset date for the corresponding warehouse facility. The following table shows the impact on our annual net warehouse interest income due to a 100-basis point increase and decrease in LIBOR or Adjusted Term SOFR, based on our warehouse borrowings outstanding at each period end. The changes shown below do not reflect an increase or decrease in the interest rate earned on our loans held for sale.

	As of June 30,
Change in annual net warehouse interest income due to: (in thousands)	2022		2021
100 basis point increase in SOFR or 30-day LIBOR	$	(11,262)	$	(15,928)
100 basis point decrease in SOFR or 30-day LIBOR (1)(2)		11,030		1,147

Our Term Loan is based on Adjusted Term SOFR as of June 30, 2022. In December 2021, we fully paid the prior $300 million term loan agreement, which was based on interest at 30-day LIBOR and entered into a $600 million note payable with an interest based Adjusted Term SOFR and a SOFR floor of 50 basis points. The following table shows the impact on our annual earnings due to a 100-basis point increase and decrease in SOFR or 30-day LIBOR as of June 30, 2022 and June 30, 2021, respectively, based on our current and previous notes payable balance outstanding at each period end. The Alliant note payable is fixed-rate debt; therefore, there is no impact to our earnings related to this debt when interest rates change.

	As of June 30,
Change in annual income from operations due to: (in thousands)	2022		2021
100 basis point increase in SOFR or 30-day LIBOR	$	(5,970)	$	(2,933)
100 basis point decrease in SOFR or 30-day LIBOR (1)(2)		5,970		295

(1) The decrease as of June 30, 2021 is limited to 30-day LIBOR as of June 30, 2021, as it was less than 100 basis points, or the interest rate floor, if applicable.

(2) The decrease as of June 30, 2022 is limited to 30-day LIBOR or SOFR as of June 30, 2022, as they were less than 100 basis points, or the interest rate floor, if applicable.

Market Value Risk

The fair value of our MSRs is subject to market-value risk. 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 $40.6 million as of June 30, 2022 compared to $36.9 million as of June 30, 2021. Our Fannie Mae and Freddie Mac servicing engagements provide for prepayment fees in the event of a voluntary prepayment prior to the expiration of the prepayment protection period. Our servicing contracts with institutional investors and HUD do not require them to provide us with prepayment fees. As of June 30, 2022, 88% of the servicing fees are protected from the risk of prepayment through prepayment provisions, compared to 89% as of June 30, 2021. Given this significant level of prepayment protection, we do not hedge our servicing portfolio for prepayment risk.

London Interbank Offered Rate (“LIBOR”) Transition

In the first quarter of 2021, the United Kingdom’s Financial Conduct Authority, the regulator for the administration of LIBOR, announced specific dates for its intention to stop publishing LIBOR rates, including the 30-day LIBOR (our primary reference rate) which is scheduled for

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June 30, 2023. It is expected that legacy LIBOR-based loans will transition to Secured Overnight Financing Rate (“SOFR”) on or before June 30, 2023. With respect to the loans we underwrite and service, we have been working closely with the GSEs on this matter through our participation on subcommittees and advisory councils. We continue to monitor our LIBOR exposure, review legal contracts and assess fallback language impacts, engage with our clients and other stakeholders, and monitor developments associated with LIBOR alternatives. We have also updated our debt agreements with warehouse facility providers to include fallback language governing the transition and have already transitioned our Term Loan and five of our warehouse facilities to SOFR.

Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.

Based on that evaluation, the principal executive officer and principal financial officer concluded that the design and operation of these disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed in our reports under the Securities and Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have integrated and continue to enhance the accounting processes and internal controls over financial reporting for Alliant and its affiliates into our internal control over financial reporting environment.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may be party to various claims and litigation, none of which we believe is material. We cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties and other costs, and our reputation and business may be impacted. Our management believes that any liability that could be imposed on us in connection with the disposition of any pending lawsuits would not have a material adverse effect on our business, results of operations, liquidity, or financial condition.

Item 1A. Risk Factors

We have included in Part I, Item 1A of our 2021 Form 10-K descriptions of certain risks and uncertainties that could affect our business, future performance, or financial condition (the “Risk Factors”). There have been no material changes from the disclosures provided in the 2021 Form 10-K with respect to the Risk Factors. Investors should consider the Risk Factors prior to making an investment decision with respect to the Company’s stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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. During the quarter ended June 30, 2022, we purchased 10 thousand shares to satisfy grantee tax withholding obligations on share-vesting events. During the first quarter of 2022, the Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 13, 2022. During the

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quarter ended June 30, 2022, we repurchased 109 thousand shares under this share repurchase program. The Company had $63.9 million of authorized share repurchase capacity remaining as of June 30, 2022. The following table provides information regarding common stock repurchases for the quarter ended June 30, 2022:

				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
April 1-30, 2022	5,380	$	128.05	—		75,000,000
May 1-31, 2022	39,928		103.01	39,928		70,885,840
June 1-30, 2022	73,995		101.32	69,124		63,901,743
2nd Quarter	119,303	$	103.09	109,052

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

(a) Exhibits:

2.1		Contribution Agreement, dated as of October 29, 2010, by and among Mallory Walker, Howard W. Smith, William M. Walker, Taylor Walker, Richard C. Warner, Donna Mighty, Michael Yavinsky, Edward B. Hermes, Deborah A. Wilson and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 2.1 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
2.2		Contribution Agreement, dated as of October 29, 2010, between Column Guaranteed LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 2.2 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
2.3		Amendment No. 1 to Contribution Agreement, dated as of December 13, 2010, by and between Walker & Dunlop, Inc. and Column Guaranteed LLC (incorporated by reference to Exhibit 2.3 to Amendment No. 6 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 13, 2010)
2.4		Purchase Agreement, dated June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, CW Financial Services LLC and CWCapital LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on June 15, 2012)
2.5		Purchase Agreement, dated as of August 30, 2021, by and among Walker & Dunlop, Inc., WDAAC, LLC, Alliant Company, LLC, Alliant Capital, Ltd., Alliant Fund Asset Holdings, LLC, Alliant Asset Management Company, LLC, Alliant Strategic Investments II, LLC, ADC Communities, LLC, ADC Communities II, LLC, AFAH Finance, LLC, Alliant Fund Acquisitions, LLC, Vista Ridge 1, LLC, Alliant, Inc., Alliant ADC, Inc., Palm Drive Associates, LLC, and Shawn Horwitz (incorporated by reference to Exhibit 2.5 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021)
2.6		Share Purchase Agreement dated February 4, 2022 by and among Walker & Dunlop, Inc., WD-GTE, LLC, GeoPhy B.V. (“GeoPhy”), the several persons and entities constituting the holders of all of GeoPhy’s issued and outstanding shares of capital stock, and Shareholder Representative Services LLC, as representative of the Shareholders (incorporated by reference to Exhibit 2.6 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021)
3.1		Articles of Amendment and Restatement of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
3.2		Amended and Restated Bylaws of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 8, 2018)
4.1		Specimen Common Stock Certificate of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on September 30, 2010)
4.2		Registration Rights Agreement, dated December 20, 2010, by and among Walker & Dunlop, Inc. and Mallory Walker, Taylor Walker, William M. Walker, Howard W. Smith, III, Richard C. Warner, Donna Mighty, Michael Yavinsky, Ted Hermes, Deborah A. Wilson and Column Guaranteed LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 27, 2010)
4.3		Stockholders Agreement, dated December 20, 2010, by and among William M. Walker, Mallory Walker, Column Guaranteed LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 27, 2010)
4.4		Piggy-Back Registration Rights Agreement, dated June 7, 2012, by and among Column Guaranteed, LLC, William M. Walker, Mallory Walker, Howard W. Smith, III, Deborah A. Wilson, Richard C. Warner, CW Financial Services LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 filed on August 9, 2012)
4.5		Voting Agreement, dated as of June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, Mallory Walker, William M. Walker, Richard Warner, Deborah Wilson, Richard M. Lucas, and Howard W. Smith, III, and CW Financial Services LLC (incorporated by reference to Annex C of the Company’s proxy statement filed on July 26, 2012)
4.6		Voting Agreement, dated as of June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, Column Guaranteed, LLC and CW Financial Services LLC (incorporated by reference to Annex D of the Company’s proxy statement filed on July 26, 2012)
10.1	†*	Amended and Restated Employment Agreement, dated May 4, 2022, by and between Walker & Dunlop, Inc. and Stephen P. Theobald
10.2	†*	Amended and Restated Employment Agreement, dated May 4, 2022, by and between Walker & Dunlop, Inc. and Gregory A. Florkowski
10.3	†*	Indemnification Agreement, dated May 4, 2022, by and among Walker & Dunlop, Inc. and Gregory A. Florkowski
10.4	†*	Non-Executive Director Compensation Rates
10.5		Eleventh Amendment to Second Amended and Restated Warehousing Credit and Security Agreement, dated as of April 7, 2022, by and among Walker & Dunlop, LLC, Walker & Dunlop, Inc. and PNC Bank, National Association, as Lender (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 12, 2022)
10.6		Twelfth Amendment to Second Amended and Restated Warehousing Credit and Security Agreement, dated as of May 12, 2022, by and among Walker & Dunlop, LLC, Walker & Dunlop, Inc. and PNC Bank, National Association, as Lender (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 16, 2022)
31.1	*	Certification of Walker & Dunlop, Inc.'s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Walker & Dunlop, Inc.'s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	**	Certification of Walker & Dunlop, Inc.'s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	*	Inline XBRL Taxonomy Extension Schema Document

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101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*: Filed herewith.

**: Furnished herewith. Information in this Quarterly Report on Form 10-Q furnished herewith shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

†Denotes a management contract or compensation plan, contract, or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Walker & Dunlop, Inc.
Date: August 4, 2022	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer
Date: August 4, 2022	By:	/s/ Gregory A. Florkowski
		Gregory A. Florkowski
		Executive Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 4^th day of May 2022, by Walker & Dunlop, Inc., a Maryland corporation (the “Company”) with its principal place of business at 7272 Wisconsin Avenue, Suite 1300, Bethesda, MD 20814, and Stephen P. Theobald, residing at the address on file with the Company (the “Executive”).

WHEREAS, Company and Executive are parties to an Employment Agreement dated May 14, 2020 (the “Previous Employment Agreement”), pursuant to which Executive has been employed by Company;

The parties desire to enter into this Agreement to reflect the Executive’s executive capacities in the Company’s business and to provide for the Company’s continued employment of the Executive; and

WHEREAS, the parties intend this Agreement to replace and supersede the Previous Employment Agreement in all respects on the Commencement date (as defined below).

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

1. Term of Employment

The Company hereby continues to employ the Executive, and the Executive hereby accepts continued employment with the Company, upon the terms and conditions set forth in this Agreement.  Unless terminated earlier pursuant to Section 5, the Executive’s employment pursuant to this Agreement shall be for the three (3) year period commencing on June 1, 2022 (the “Commencement Date”) and ending on the third anniversary of the Commencement Date (the “Initial Term”).  The Initial Term shall be extended for an additional twelve (12) months on the third and each subsequent anniversary of the Commencement Date unless the Company or the Executive provides written notice to the contrary at least sixty (60) days before the applicable anniversary of the Commencement Date.  The Initial Term, together with any such extensions, shall be referred to herein as the “Employment Period.”

2. Title; Duties

The Executive shall be employed as Executive Vice President and Chief Operating Officer of the Company.  The Executive shall report to the Chief Executive Officer of the Company, who shall have the authority to direct, control and supervise the activities of the Executive.  The Executive shall perform such services consistent with the Executive’s position as may be assigned to Executive from time to time by the Chief Executive Officer of the Company and such as are consistent with the bylaws of the Company as they may be amended from time to time, including, but not limited to, managing the operating affairs of the Company.

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3. Extent of Services

(a) General.  The Executive agrees not to engage in any business activities during the Employment Period except those which are for the sole benefit of the Company and its subsidiaries, and to devote Executive’s entire business time, attention, skill and effort to the performance of Executive’s duties under this Agreement.  Notwithstanding the foregoing, the Executive may, without impairing or otherwise adversely affecting the Executive’s performance of Executive’s duties to the Company, (i) engage in personal investments and charitable, professional and civic activities, and (ii) with the prior approval of the Chief Executive Officer of the Company, serve on the boards of directors of corporations other than the Company, provided, however, that no such approval shall be necessary for the Executive’s continued service on any board of directors on which the Executive was serving on the date of this Agreement, all of which have been previously disclosed to the Company’s Board of Directors in writing and provided further, that in no event shall the Executive be permitted to serve on the board of directors of any other entity that competes with the Company.  The Executive shall perform Executive’s duties to the best of Executive’s ability, shall adhere to the Company’s published policies and procedures, and shall use Executive’s best efforts to promote the Company’s interests, reputation, business and welfare.

(b) Corporate Opportunities.  The Executive agrees that Executive will not take personal advantage of any business opportunities which arise during Executive’s employment with the Company and which may be of benefit to the Company.  All material facts regarding such opportunities must be promptly reported by the Executive to the Chief Executive Officer of the Company for consideration by the Company.

4. Compensation and Benefits

(a) Salary.  The Company shall pay the Executive a gross base annual salary (“Base Salary”) of five hundred thousand dollars ($500,000).  The Base Salary shall be payable in arrears and in accordance with the Company’s normal payroll practices, minus such deductions as may be required by law or reasonably requested by the Executive.  The Company’s Compensation Committee (the “Compensation Committee”) shall review Executive’s Base Salary annually in conjunction with its regular review of employee salaries and may increase (but not decrease) the Base Salary as in effect from time to time as the Compensation Committee shall deem appropriate.

(b) Annual Bonus. Executive shall be entitled to earn bonuses with respect to each calendar year of the Employment Period (or partial calendar year), based upon Executive’s and the Company’s achievement of performance objectives set by the Company (“Annual Bonus”), with a target bonus (“Target Bonus”) of one hundred fifty percent (150%) of Executive’s Base Salary.  Any such Annual Bonus earned by the Executive shall be paid annually by March 15 of the year following the end of the year for which the Annual Bonus was earned.

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(c) Equity Grants.  The Executive will be eligible for grants of equity or equity-based awards under any equity compensation plans of the Company as in effect from time to time at the discretion of the Company’s Board of Directors.

(d) Other Benefits.  The Executive shall be entitled to paid time off and holiday pay in accordance with the Company’s policies in effect from time to time and shall be eligible to participate in such life, health, and disability insurance, pension, deferred compensation (including any matching contribution program) and incentive plans, equity award plans (including any performance-based equity award program), performance bonuses and other benefits as the Company extends, as a matter of policy, to its executive employees, consistent with the terms of such plans and arrangements and as such plans and arrangements may be amended from time to time.

(e) Reimbursement of Business Expenses.  The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of Executive’s duties, responsibilities or services under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers, and/or such other supporting information as the Company may reasonably request.

(f) Timing of Reimbursements.  Any reimbursement under this Agreement that is taxable to the Executive shall be made in no event later than sixty (60) days following the calendar year in which the Executive incurred the expense.

5. Termination

(a) Termination by the Company for Cause.  The Company may terminate the Executive’s employment under this Agreement at any time for Cause, upon written notice by the Company to the Executive.  For purposes of this Agreement, “Cause” for termination shall mean any of the following: (i) the conviction of the Executive of, or the entry of a plea of guilty or nolo contendere by the Executive to, any felony; (ii) fraud, misappropriation or embezzlement by the Executive; (iii) the Executive’s willful failure or gross negligence in the performance of Executive’s assigned duties for the Company, which failure or negligence continues for more than fifteen (15) calendar days following the Executive’s receipt of written notice of such willful failure or gross negligence; (iv) the Executive’s breach of any fiduciary duties to the Company; (v) a material violation of a material Company policy which, if such violation is curable, such failure is not cured within fifteen (15) calendar days following the Executive’s receipt of written notice of such failure, with such detail as sufficient to apprise Executive of the nature and extent of such failure; or (vi) the material breach by the Executive of any material term of this Agreement, which, if such breach is curable, such breach is not cured within fifteen (15) calendar days following the Executive’s receipt of written notice of such breach, with such detail as sufficient to apprise Executive of the nature and extent of such breach.

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(b) Termination by the Company Without Cause or by the Executive Without Good Reason.  Either party may terminate this Agreement at any time without Cause (in the case of the Company) or without Good Reason (in the case of the Executive), upon giving the other party sixty (60) days’ written notice.  At the Company’s sole discretion, it may substitute sixty (60) days’ Base Salary (or any lesser portion for any shortened period provided) in lieu of notice.  Any Base Salary paid to the Executive in lieu of notice shall not be offset against any entitlement the Executive may have to the Severance Payment pursuant to Section 6(c).  For purposes of this Agreement, in the event the Company elects not to extend the Employment Period in accordance with Section 1 hereof, Executive’s employment shall terminate on the last day of the Employment Period and such election shall be deemed a termination by the Company without Cause.

(c) Termination by Executive for Good Reason.  The Executive may terminate Executive’s employment under this Agreement at any time for Good Reason, upon written notice by the Executive to the Company.  For purposes of this Agreement, Good Reason for termination shall mean, without the Executive’s consent: (i) the assignment to the Executive of substantial duties or responsibilities inconsistent with the Executive’s position at the Company, or any other action by the Company which results in a substantial diminution of the Executive’s duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice thereof from the Executive; (ii) a requirement that the Executive work principally from a location that is twenty (20) miles further from the Executive’s residence than the Company’s address first written above; (iii) a ten percent (10%) or greater reduction in the Executive’s Base Salary, Target Bonus, excluding any reductions caused by the failure to achieve performance targets, or annual grant date fair value (as reasonably determined by the Company) of equity or equity-based awards granted under any equity compensation plans of the Company that vest solely based on the passage of time (the “Time-Based Equity Awards”); or (iv) any material breach by the Company of this Agreement.  Good Reason shall not exist pursuant to any subsection of this Section 5(c) unless (A) the Executive shall have delivered notice to the Company’s Board of Directors within ninety (90) days of the occurrence of such event constituting Good Reason, and (B) the Company’s Board of Directors fails to remedy the circumstances giving rise to the Executive’s notice within thirty (30) days of receipt of notice.  The Executive must terminate employment under this Section 5(c) at a time agreed reasonably with the Company, but in any event within one hundred fifty (150) days from the occurrence of an event constituting Good Reason.  For purposes of Good Reason, the Company shall be defined to include any successor to the Company which has assumed the obligations of the Company through merger, acquisition, stock purchase, asset purchase or otherwise.

(d) Executive’s Death or Disability.  The Executive’s employment shall terminate immediately upon Executive’s death or, upon written notice as set forth below, Executive’s Disability.  As used in this Agreement, “Disability” shall mean such physical or mental impairment as would render the Executive unable to perform each of the essential duties of the Executive’s position by reason of a medically

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determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than twelve (12) months.  If the Employment Period is terminated by reason of the Executive’s Disability, either party shall give thirty (30) days’ advance written notice to that effect to the other.

(e) Executive’s Retirement.  The Executive’s employment shall terminate upon Executive’s Retirement.  As used in this Agreement, “Retirement” shall mean the Executive resigns on or after age sixty five pursuant to this Section 5(e). If the Employment Period is terminated by reason of the Executive’s Retirement, the Executive shall give one hundred eighty (180) days’ advance notice to the effect to the Company.

6. Effect of Termination

(a) General.  Regardless of the reason for any termination of this Agreement and subject to this Section 6, the Executive (or the Executive’s estate if the Employment Period ends on account of the Executive’s death) shall be entitled to (i) payment of any unpaid portion of the Base Salary through the effective date of termination; (ii) reimbursement for any outstanding reasonable business expense incurred under Section 4(e) in performing Executive’s duties hereunder in accordance with Company policy; (iii) continued insurance benefits to the extent required by law; (iv) payment of any vested but unpaid rights as required independent of this Agreement by the terms of any bonus or other incentive pay or equity plan, or any other employee benefit plan or program of the Company in accordance with the terms of such plan or program; and (v) except in the case of Termination by the Company for Cause, any unpaid Annual Bonus earned by Executive for the calendar year prior to the calendar year in which Executive’s termination occurs, as determined by the Company based on actual performance achieved, which Annual Bonus, if any, shall be paid to Executive when bonuses for such year are paid to actively employed senior executives of the Company. Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other compensatory amounts hereunder (if any) shall cease upon the termination of Executive’s employment hereunder.  Upon termination of this Agreement for any reason, the Executive shall resign from all boards and committees of the Company, its affiliates and its subsidiaries.

(b) Termination by the Company for Cause or by Executive Without Good Reason.  If the Company terminates the Executive’s employment for Cause or the Executive terminates Executive’s employment without Good Reason, the Executive shall have no rights or claims against the Company except to receive the payments and benefits described in Section 6(a).

(c) Termination by the Company Without Cause or by the Executive with Good Reason.  If the Company terminates the Executive’s employment without Cause pursuant to Section 5(b), or the Executive terminates employment with Good

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Reason pursuant to Section 5(c), the Executive shall be entitled to receive, in addition to the items referenced in Section 6(a), the following:

(i)        continued payment of the Base Salary, at the rate in effect on the last day of employment (but in no event in an annual amount less than as set forth in Section 4(a)), for a period of twelve (12) months.  Such amount shall be paid in approximately equal installments on the Company’s regularly scheduled payroll dates, subject to all legally required payroll deductions and withholdings for sums owed by the Executive to the Company;

(ii)       continued payment by the Company for the Executive’s life and health insurance coverage for twelve (12) months (the “Continuation Period”) to the same extent that the Company paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage; provided that if continued payment by the Company of the Executive’s health insurance coverage would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended, or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing such continued payment, the Company will instead pay the Executive on the first day of each month a fully taxable cash payment equal to the Company’s premiums for that month (the “Monthly Premium”) and a corresponding Tax Indemnity Payment (defined below), subject to applicable tax withholdings, for the remainder of the Continuation Period;

(iii)      payments equal to two (2) times the average Annual Bonus earned by the Executive over the two (2) calendar years preceding the year of termination (or if the Executive has not been employed for two (2) calendar years, payments equal to two (2) times the Executive’s Target Bonus for the year of termination).  By way of example only, if the Executive’s Annual Bonus over the preceding two (2) years was $300,000 and $0, the average would be $150,000 and the payment under this Section 6(c)(iii) would equal $300,000.  Such amount shall be paid to the Executive within ten (10) days after the end of the Restricted Period (as defined below);

(iv)      a pro rata portion of the Annual Bonus for the year of termination, as reasonably determined by the Company based upon the extent to which performance goals for the year of termination are achieved, which Annual Bonus, if any, shall be paid to Executive no later than March 15 of the year following the year in which such termination occurs; and

(v) immediate vesting as of the last day of employment in any unvested Time-Based Equity Awards (with any such awards that vest in whole or in part based on the attainment of performance-vesting conditions (“Performance-

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Based Equity Awards”) being governed by the terms of the applicable award agreement).

None of the benefits described in this Section 6(c) (the “Severance Payments”) will be payable unless the Executive has signed a general release (in substantially the form attached hereto as Exhibit A) within forty-five (45) days of date of termination, which has (and not until it has) become irrevocable, satisfactory to the Company in the reasonable exercise of its discretion, releasing the Company, its affiliates, and their directors, officers and employees, from any and all claims or potential claims arising from or related to the Executive’s employment or termination of employment.  The Severance Payments shall commence on the Company’s first regular payroll date occurring on or after the sixtieth (60^th) date following the date of termination (the “First Payroll Date”), with amounts otherwise payable under the Company’s normal payroll procedures prior to the First Payroll Date to be paid in lump sum on the First Payroll Date without interest thereon.

For purposes of Section 6(c)(ii), the “Tax Indemnity Payment” shall equal the aggregate amount of additional payments necessary to deliver to the Executive  the Monthly Premium amount in full on a net after-tax basis with the amount of each such Tax Indemnity Payment to be based upon the Tax Rate in effect when the corresponding Monthly Premium amount is paid.  For the purposes of the foregoing, “Tax Rate” means the Executive’s current tax rate based upon the combined federal and state and local income, earnings, Medicare and any other tax rates applicable to the Executive, all at the highest marginal rates of taxation in the county and state of the Executive’s residence on the date of determination, net of the reduction in federal income taxes which could be obtained by deduction of such state and local taxes.

(d) Termination In the Event of Death, Disability or Retirement.  In the event of a termination of employment due to death, Disability or Retirement, the Executive shall be entitled to receive, in addition to the items referenced in Section 6(a), the following:

(i) a pro rata portion of the Annual Bonus for the year of termination, as reasonably determined by the Company based upon the extent to which performance goals for the year of termination are achieved, which Annual Bonus, if any, shall be paid to Executive (or Executive’s estate) no later than March 15 of the year following the year in which such termination occurs; and

(ii) immediate vesting as of the last day of employment in any unvested Time-Based Equity Awards (with any Performance-Based Equity Awards being governed by the terms of the applicable award agreement).

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7. Confidentiality

(a) Definition of Proprietary Information.  The Executive acknowledges that Executive may be furnished or may otherwise receive or have access to confidential information which relates to the Company’s past, present or future business activities, strategies, services or products, research and development; financial analysis and data; improvements, inventions, processes, techniques, designs or other technical data; profit margins and other financial information; fee arrangements; compilations for marketing or development; confidential personnel and payroll information; or other information regarding administrative, management, or financial activities of the Company, or of a third party which provided proprietary information to the Company on a confidential basis.  All such information, including in any electronic form, and including any materials or documents containing such information, shall be considered by the Company and the Executive as proprietary and confidential (the “Proprietary Information”).

(b) Exclusions.  Notwithstanding the foregoing, Proprietary Information shall not include information in the public domain not as a result of a breach of any duty by the Executive or any other person.

(c) Obligations.  Both during and after the Employment Period, the Executive agrees to preserve and protect the confidentiality of the Proprietary Information and all physical forms thereof, whether disclosed to Executive before this Agreement is signed or afterward.  In addition, the Executive shall not (i) disclose or disseminate the Proprietary Information to any third party, including employees of the Company (or its affiliates) without a legitimate business need to know during the Employment Period; (ii) remove the Proprietary Information from the Company’s premises without a valid business purpose; or (iii) use the Proprietary Information for Executive’s own benefit or for the benefit of any third party.

(d) Return of Proprietary Information.  The Executive acknowledges and agrees that all the Proprietary Information used or generated during the course of working for the Company is the property of the Company.  The Executive agrees to deliver to the Company all documents and other tangibles containing the Proprietary Information at any time upon request by the Company’s Board of Directors during Executive’s employment and immediately upon termination of Executive’s employment.

(e) Whistleblower and Trade Secret Protections. Notwithstanding anything to the contrary herein, nothing in this Agreement is intended to or will be used by the Company in any way to prohibit Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833,

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notwithstanding anything to the contrary in this Agreement: (A) Executive shall not be in breach of this Agreement and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (B) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

8. Noncompetition

(a) Restriction on Competition.  For the period of the Executive’s employment with the Company and for twelve (12) months following the expiration or termination of the Executive’s employment with the Company (the “Restricted Period”), the Executive agrees not to engage, directly or indirectly, as a manager, employee, consultant, partner, principal, agent, representative, or in any other individual or representative capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment, including but not limited to the multifamily finance business, where material is defined as fifteen percent (15%) of the gross revenues of the Company based on the most recent quarterly earnings.  Executive further agrees that for the period of the Executive’s employment with the Company and for the Restricted Period, the Executive will not engage, directly or indirectly, as an owner, director, trustee, member, stockholder, or in any other corporate capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment.  Notwithstanding the foregoing, the Executive shall not be deemed to have violated this Section 8(a) solely (i) by reason of Executive’s passive ownership of 1% or less of the outstanding stock of any publicly traded corporation or other entity, (ii) by providing legal, accounting or audit services as an employee or partner of a professional services organization or (iii) by providing services to any investment banking or other institution that do not relate to any material business that the Company conducts as of the date of the Executive’s termination of employment.

(b) Non-Solicitation of Clients.  During the Restricted Period, the Executive agrees not to solicit, directly or indirectly, on Executive’s own behalf or on behalf of any other person(s), any client of the Company to whom the Company had provided services at any time during the Executive’s employment with the Company in any line of business that the Company conducts as of the date of the Executive’s termination of employment or that the Company is actively soliciting, for the purpose of marketing or providing any service competitive with any service then offered by the Company.

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(c) Non-Solicitation of Employees.  During the Restricted Period, the Executive agrees that Executive will not, directly or indirectly, hire or attempt to hire or cause any business, other than an affiliate of the Company, to hire any person who is then or was at any time during the preceding six (6) months an employee of the Company and who is at the time of such hire or attempted hire, or was at the date of such employee’s separation from the Company a vice president, senior vice president or executive vice president or other senior executive employee of the Company.

(d) Acknowledgement.  The Executive acknowledges that Executive will acquire much Proprietary Information concerning the past, present and future business of the Company as the result of Executive’s employment, as well as access to the relationships between the Company and its clients and employees.  The Executive further acknowledges that the business of the Company is very competitive and that competition by Executive in that business during Executive’s employment, or after Executive’s employment terminates, would severely injure the Company.  The Executive understands and agrees that the restrictions contained in this Section 8 are reasonable and are required for the Company’s legitimate protection, and do not unduly limit Executive’s ability to earn a livelihood.

(e) Rights and Remedies upon Breach.  The Executive acknowledges and agrees that any breach by Executive of any of the provisions of Sections 7 and 8 (the “Restrictive Covenants”) would result in irreparable injury and damage for which money damages would not provide an adequate remedy.  Therefore, if the Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company and its affiliates, including the Company, shall have the following rights and remedies, each of which rights and remedies shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company and its affiliates, including the Company, under law or in equity (including, without limitation, the recovery of damages):

(i) The right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages) by any court of competent jurisdiction, including, without limitation, the right to an entry against the Executive of restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of such covenants; and

(ii) The right and remedy to require the Executive to account for and pay over to the Company and its affiliates all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by Executive as the result of any transactions constituting a breach of the Restrictive Covenants, and the Executive shall account for and pay over such Benefits to the Company and, if applicable, its affected affiliates.

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(f) Without limiting Section 13(j), if any court or other decision-maker of competent jurisdiction determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

9. Executive Representation

The Executive represents and warrants to the Company that Executive is not now under any obligation of a contractual or other nature to any person, business or other entity which is inconsistent or in conflict with this Agreement or which would prevent Executive from performing Executive’s obligations under this Agreement.

10. Mediation and Arbitration

(a) Except as provided in Section 10(b), any disputes between the Company and the Executive in any way concerning the Executive’s employment, the termination of Executive’s employment, this Agreement or its enforcement shall be subject to mediation.  If the Company and the Executive cannot agree upon a mediator, each shall select one name from a list of mediators maintained by any bona fide dispute resolution provider or other private mediator; the two selected shall then choose a third person who will serve as the sole mediator. The first mediation session shall occur within forty-five (45) calendar days following the notice of a dispute.  If within sixty (60) days of the first mediation session the claim is not resolved, either party may request that the dispute be settled exclusively by arbitration in the state of Maryland by a single arbitrator, selected in the same manner as the mediator, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, any or all of the following courts have jurisdiction:  (i) the United States District Court for the Fourth Circuit, (ii) any of the courts of the State of Maryland, or (iii) any other court having jurisdiction.  Any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive waive to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  A judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its costs and expenses arising in connection with any arbitration proceeding.

(b) Notwithstanding the foregoing, the Company, in its sole discretion, may bring an action in any court of competent jurisdiction to seek injunctive relief and such other relief as the Company shall elect to enforce the Restrictive Covenants.  If the courts

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of any one or more of such jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of breadth of scope or otherwise it is the intention of the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided in Section 8(e) above in the courts of any other jurisdiction within the geographical scope of such Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective jurisdictions, such Restrictive Covenants as they relate to each jurisdiction being, for this purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine of res judicata.  The parties hereby agree to waive any right to a trial by jury for any and all disputes hereunder (whether or not relating to the Restrictive Covenants).

11. Section 409A.

To the extent the Executive would be subject to the additional twenty percent (20%) tax imposed on certain deferred compensation arrangements pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and preserve to the maximum extent possible the original intent and economic benefit to the Executive and the Company, and the parties shall promptly execute any amendment reasonably necessary to implement this Section 11.

(a) For purposes of Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement including, without limitation, each severance payment and health insurance payment shall be treated as a right to receive a series of separate and distinct payments.

(b) The Executive will be deemed to have a date of termination for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A

(c) Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6) month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six (6) month period (or upon the Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.   To the extent that any benefits to be provided during the Delay Period are

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considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

(d) (A) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (B) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (C) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

(e) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

12. Clawback Policies

The Executive is subject to any recoupment or clawback policies that the Company may implement or maintain at any time regarding incentive-based compensation, which is granted or awarded to Executive on or after the date of this Agreement.  Such policies may include the right to recover incentive-based compensation (including equity or equity-based awards granted as compensation) awarded or received during the three-year period preceding the date on which the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under federal securities laws.  The Executive agrees to amend any awards and agreements entered into on or after the date of this Agreement as the Company may request to reasonably implement its policies.

13. Miscellaneous

(a) Notices.  All notices required or permitted under this Agreement shall be in writing and shall be deemed effective (i) upon personal delivery, (ii) upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid, or (iii) in the case of facsimile transmission or delivery by nationally recognized overnight delivery service, when received, addressed as follows:

(b) If to the Company, to:

Walker & Dunlop, Inc.

7272 Wisconsin Avenue

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Suite 1300

Bethesda, MD 20814

Attention: General Counsel

(i) If to the Executive, to:

Stephen P. Theobald

Address on file with the Company

or to such other address or addresses as either party shall designate to the other in writing from time to time by like notice.

(c) Pronouns.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

(d) Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

(e) Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive, which amendment or modification is consented to by the Company.

(f) Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Maryland, without regard to its conflicts of laws principles.

(g) Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any entity with which or into which the Company may be merged or which may succeed to its assets or business or any entity to which the Company may assign its rights and obligations under this Agreement; provided, however, that the obligations of the Executive are personal and shall not be assigned or delegated by the Executive.

(h) Waiver.  No delays or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent by the Company shall not be effective unless consented to by the Company.  A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

(i) Captions.  The captions appearing in this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

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(j) Severability.  In case any provision of this Agreement shall be held by a court or arbitrator with jurisdiction over the parties to this Agreement to be invalid, illegal or otherwise unenforceable, such provision shall be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

(k) Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

WALKER & DUNLOP, INC.
By:	/s/ William M. Walker
Name:	William M. Walker
Title:	Chairman and Chief Executive Officer
/s/ Stephen P. Theobald
Stephen P. Theobald
May 4, 2022
Date

Exhibit A

WAIVER AND RELEASE AGREEMENT

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [______________] (the “Effective Date”), by Stephen P. Theobald (“Executive”) in consideration of severance pay (the “Severance Payment”) provided to Executive by Walker & Dunlop, Inc., a Maryland corporation (the “Company”), pursuant to the Employment Agreement by and between the Company and Executive (the “Employment Agreement”).

1.Waiver and Release.  Subject to the last sentence of the first paragraph of this Section 1, Executive, on Executive’s own behalf and on behalf of Executive’s heirs, executors, administrators, attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever discharges the Company and each of its affiliates, parents, successors, predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “Employer”), from any and all causes of action, claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of Executive’s signing of this Release, concerning Executive’s employment or separation from employment.  Subject to the last sentence of the first paragraph of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws whatsoever as may be created or amended from time to time); any claim arising under any state or local laws, ordinances or regulations (including, but not limited to, any state or local laws, ordinances or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy or loss of consortium.  Notwithstanding any other provision of this Release to the contrary, this Release does not encompass, and Executive does not release, waive or discharge, the obligations of the Company (a) to make the payments and provide the other benefits contemplated by Section 6(a) and Section 6(c) of the Employment Agreement, or (b) with respect to Executive’s ownership of vested equity securities of the Company, or (c) under any indemnification or similar agreement with Executive or indemnification under the Articles of Incorporation, Bylaws or other governing instruments of the Company.

Executive understands that by signing this Release, Executive is not waiving any claims or administrative charges which cannot be waived by law.  Executive is waiving, however, any right to monetary recovery or individual relief should any federal, state or local agency (including the Equal Employment Opportunity Commission) pursue any claim on

Executive’s behalf arising out of or related to Executive’s employment with and/or separation from employment with the Company.

Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Release.

2.Acknowledgments.  Executive is signing this Release knowingly and voluntarily.  Executive acknowledges that:

(a)Executive is hereby advised in writing to consult an attorney before signing this Release;

(b)Executive has relied solely on Executive’s own judgment and/or that of Executive’s attorney regarding the consideration for and the terms of this Release and is signing this Release knowingly and voluntarily of Executive’s own free will;

(c)Executive is not entitled to the Severance Payment unless Executive agrees to and honors the terms of this Release;

(d)Executive has been given at least twenty-one (21) calendar days to consider this Release, or Executive expressly waives the right to have at least twenty-one (21) days to consider this Release;

(e)Executive may revoke this Release within seven (7) calendar days after signing it by submitting a written notice of revocation to the Employer.  Executive further understands that this Release is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if Executive revokes this Release within the seven (7) day revocation period, Executive will not receive the Severance Payment;

(f)Executive has read and understands the Release and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen or unforeseen claims presently asserted or otherwise arising through the date of signing of this Release that Executive may have against the Employer; and

(g)No statements made or conduct by the Employer has in any way coerced or unduly influenced Executive to execute this Release.

3.No Admission of Liability.  This Release does not constitute an admission of liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any wrongdoing whatsoever against the Executive, and the Employer expressly denies that any wrongdoing has occurred.

4.Entire Agreement.  There are no other agreements of any nature between the Employer and Executive with respect to the matters discussed in this Release, except as expressly stated herein, and in signing this Release, Executive is not relying on any agreements or representations, except those expressly contained in this Release.

5.Execution.  It is not necessary that the Employer sign this Release following Executive’s full and complete execution of it for it to become fully effective and enforceable.

6.Severability.  If any provision of this Release is found, held or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or controlling law, the remainder of this Release shall continue in full force and effect.

7.Governing Law.  This Release shall be governed by the laws of the State of Maryland, excluding the choice of law rules thereof.

8.Headings.  Section and subsection headings contained in this Release are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Release for any purpose, and they shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year first herein above written.

EXECUTIVE:

Stephen P. Theobald

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 4^th day of May 2022, by Walker & Dunlop, Inc., a Maryland corporation (the “Company”) with its principal place of business at 7272 Wisconsin Avenue, Suite 1300, Bethesda, MD 20814, and Gregory A. Florkowski, residing at the address on file with the Company (the “Executive”).

WHEREAS, Company and Executive are parties to an Employment Agreement dated January 1, 2015 (the “Previous Employment Agreement”), pursuant to which Executive has been employed by Company;

The parties desire to enter into this Agreement to reflect the Executive’s executive capacities in the Company’s business and to provide for the Company’s continued employment of the Executive; and

WHEREAS, the parties intend this Agreement to replace and supersede the Previous Employment Agreement in all respects on the Commencement date (as defined below).

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

1. Term of Employment

The Company hereby continues to employ the Executive, and the Executive hereby accepts continued employment with the Company, upon the terms and conditions set forth in this Agreement.  Unless terminated earlier pursuant to Section 5, the Executive’s employment pursuant to this Agreement shall be for the three (3) year period commencing on June 1, 2022 (the “Commencement Date”) and ending on the third anniversary of the Commencement Date (the “Initial Term”).  The Initial Term shall be extended for an additional twelve (12) months on the third and each subsequent anniversary of the Commencement Date unless the Company or the Executive provides written notice to the contrary at least sixty (60) days before the applicable anniversary of the Commencement Date.  The Initial Term, together with any such extensions, shall be referred to herein as the “Employment Period.”

2. Title; Duties

The Executive shall be employed as Executive Vice President and Chief Financial Officer of the Company.  The Executive shall report to the Chief Executive Officer of the Company, who shall have the authority to direct, control and supervise the activities of the Executive.  The Executive shall perform such services consistent with the Executive’s position as may be assigned to Executive from time to time by the Chief Executive Officer of the Company and such as are consistent with the bylaws of the Company as they may be amended from time to time, including, but not limited to, managing the affairs of the Company.

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3. Extent of Services

(a) General.  The Executive agrees not to engage in any business activities during the Employment Period except those which are for the sole benefit of the Company and its subsidiaries, and to devote Executive’s entire business time, attention, skill and effort to the performance of Executive’s duties under this Agreement.  Notwithstanding the foregoing, the Executive may, without impairing or otherwise adversely affecting the Executive’s performance of Executive’s duties to the Company, (i) engage in personal investments and charitable, professional and civic activities, and (ii) with the prior approval of the Chief Executive Officer of the Company, serve on the boards of directors of corporations other than the Company, provided, however, that no such approval shall be necessary for the Executive’s continued service on any board of directors on which the Executive was serving on the date of this Agreement, all of which have been previously disclosed to the Company’s Board of Directors in writing and provided further, that in no event shall the Executive be permitted to serve on the board of directors of any other entity that competes with the Company.  The Executive shall perform Executive’s duties to the best of Executive’s ability, shall adhere to the Company’s published policies and procedures, and shall use Executive’s best efforts to promote the Company’s interests, reputation, business and welfare.

(b) Corporate Opportunities.  The Executive agrees that Executive will not take personal advantage of any business opportunities which arise during Executive’s employment with the Company and which may be of benefit to the Company.  All material facts regarding such opportunities must be promptly reported by the Executive to the Chief Executive Officer of the Company for consideration by the Company.

4. Compensation and Benefits

(a) Salary.  The Company shall pay the Executive a gross base annual salary (“Base Salary”) of four hundred seventy-five thousand dollars ($475,000).  The Base Salary shall be payable in arrears and in accordance with the Company’s normal payroll practices, minus such deductions as may be required by law or reasonably requested by the Executive.  The Company’s Compensation Committee (the “Compensation Committee”) shall review Executive’s Base Salary annually in conjunction with its regular review of employee salaries and may increase (but not decrease) the Base Salary as in effect from time to time as the Compensation Committee shall deem appropriate.

(b) Annual Bonus. Executive shall be entitled to earn bonuses with respect to each calendar year of the Employment Period (or partial calendar year), based upon Executive’s and the Company’s achievement of performance objectives set by the Company (“Annual Bonus”), with a target bonus (“Target Bonus”) of one hundred percent (100%) of Executive’s Base Salary.  Any such Annual Bonus earned by the Executive shall be paid annually by March 15 of the year following the end of the year for which the Annual Bonus was earned.

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(c) Equity Grants.  The Executive will be eligible for grants of equity or equity-based awards under any equity compensation plans of the Company as in effect from time to time at the discretion of the Company’s Board of Directors.

(d) Other Benefits.  The Executive shall be entitled to paid time off and holiday pay in accordance with the Company’s policies in effect from time to time and shall be eligible to participate in such life, health, and disability insurance, pension, deferred compensation (including any matching contribution program) and incentive plans, equity award plans (including any performance-based equity award program), performance bonuses and other benefits as the Company extends, as a matter of policy, to its executive employees, consistent with the terms of such plans and arrangements and as such plans and arrangements may be amended from time to time.

(e) Reimbursement of Business Expenses.  The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of Executive’s duties, responsibilities or services under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers, and/or such other supporting information as the Company may reasonably request.

(f) Timing of Reimbursements.  Any reimbursement under this Agreement that is taxable to the Executive shall be made in no event later than sixty (60) days following the calendar year in which the Executive incurred the expense.

5. Termination

(a) Termination by the Company for Cause.  The Company may terminate the Executive’s employment under this Agreement at any time for Cause, upon written notice by the Company to the Executive.  For purposes of this Agreement, “Cause” for termination shall mean any of the following: (i) the conviction of the Executive of, or the entry of a plea of guilty or nolo contendere by the Executive to, any felony; (ii) fraud, misappropriation or embezzlement by the Executive; (iii) the Executive’s willful failure or gross negligence in the performance of Executive’s assigned duties for the Company, which failure or negligence continues for more than fifteen (15) calendar days following the Executive’s receipt of written notice of such willful failure or gross negligence; (iv) the Executive’s breach of any fiduciary duties to the Company; (v) a material violation of a material Company policy which, if such violation is curable, such failure is not cured within fifteen (15) calendar days following the Executive’s receipt of written notice of such failure, with such detail as sufficient to apprise Executive of the nature and extent of such failure; or (vi) the material breach by the Executive of any material term of this Agreement, which, if such breach is curable, such breach is not cured within fifteen (15) calendar days following the Executive’s receipt of written notice of such breach, with such detail as sufficient to apprise Executive of the nature and extent of such breach.

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(b) Termination by the Company Without Cause or by the Executive Without Good Reason.  Either party may terminate this Agreement at any time without Cause (in the case of the Company) or without Good Reason (in the case of the Executive), upon giving the other party sixty (60) days’ written notice.  At the Company’s sole discretion, it may substitute sixty (60) days’ Base Salary (or any lesser portion for any shortened period provided) in lieu of notice.  Any Base Salary paid to the Executive in lieu of notice shall not be offset against any entitlement the Executive may have to the Severance Payment pursuant to Section 6(c).  For purposes of this Agreement, in the event the Company elects not to extend the Employment Period in accordance with Section 1 hereof, Executive’s employment shall terminate on the last day of the Employment Period and such election shall be deemed a termination by the Company without Cause.

(c) Termination by Executive for Good Reason.  The Executive may terminate Executive’s employment under this Agreement at any time for Good Reason, upon written notice by the Executive to the Company.  For purposes of this Agreement, Good Reason for termination shall mean, without the Executive’s consent: (i) the assignment to the Executive of substantial duties or responsibilities inconsistent with the Executive’s position at the Company, or any other action by the Company which results in a substantial diminution of the Executive’s duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice thereof from the Executive; (ii) a requirement that the Executive work principally from a location that is twenty (20) miles further from the Executive’s residence than the Company’s address first written above; (iii) a ten percent (10%) or greater reduction in the Executive’s Base Salary, Target Bonus, excluding any reductions caused by the failure to achieve performance targets, or annual grant date fair value (as reasonably determined by the Company) of equity or equity-based awards granted under any equity compensation plans of the Company that vest solely based on the passage of time (the “Time-Based Equity Awards”); or (iv) any material breach by the Company of this Agreement.  Good Reason shall not exist pursuant to any subsection of this Section 5(c) unless (A) the Executive shall have delivered notice to the Company’s Board of Directors within ninety (90) days of the occurrence of such event constituting Good Reason, and (B) the Company’s Board of Directors fails to remedy the circumstances giving rise to the Executive’s notice within thirty (30) days of receipt of notice.  The Executive must terminate employment under this Section 5(c) at a time agreed reasonably with the Company, but in any event within one hundred fifty (150) days from the occurrence of an event constituting Good Reason.  For purposes of Good Reason, the Company shall be defined to include any successor to the Company which has assumed the obligations of the Company through merger, acquisition, stock purchase, asset purchase or otherwise.

(d) Executive’s Death or Disability.  The Executive’s employment shall terminate immediately upon Executive’s death or, upon written notice as set forth below, Executive’s Disability.  As used in this Agreement, “Disability” shall mean such physical or mental impairment as would render the Executive unable to perform each of the essential duties of the Executive’s position by reason of a medically

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determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than twelve (12) months.  If the Employment Period is terminated by reason of the Executive’s Disability, either party shall give thirty (30) days’ advance written notice to that effect to the other.

(e) Executive’s Retirement.  The Executive’s employment shall terminate upon Executive’s Retirement.  As used in this Agreement, “Retirement” shall mean the Executive resigns on or after age sixty-five pursuant to this Section 5(e). If the Employment Period is terminated by reason of the Executive’s Retirement, the Executive shall give one hundred eighty (180) days’ advance notice to the effect to the Company.

6. Effect of Termination

(a) General.  Regardless of the reason for any termination of this Agreement and subject to this Section 6, the Executive (or the Executive’s estate if the Employment Period ends on account of the Executive’s death) shall be entitled to (i) payment of any unpaid portion of the Base Salary through the effective date of termination; (ii) reimbursement for any outstanding reasonable business expense incurred under Section 4(e) in performing Executive’s duties hereunder in accordance with Company policy; (iii) continued insurance benefits to the extent required by law; (iv) payment of any vested but unpaid rights as required independent of this Agreement by the terms of any bonus or other incentive pay or equity plan, or any other employee benefit plan or program of the Company in accordance with the terms of such plan or program; and (v) except in the case of Termination by the Company for Cause, any unpaid Annual Bonus earned by Executive for the calendar year prior to the calendar year in which Executive’s termination occurs, as determined by the Company based on actual performance achieved, which Annual Bonus, if any, shall be paid to Executive when bonuses for such year are paid to actively employed senior executives of the Company. Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other compensatory amounts hereunder (if any) shall cease upon the termination of Executive’s employment hereunder.  Upon termination of this Agreement for any reason, the Executive shall resign from all boards and committees of the Company, its affiliates and its subsidiaries.

(b) Termination by the Company for Cause or by Executive Without Good Reason.  If the Company terminates the Executive’s employment for Cause or the Executive terminates Executive’s employment without Good Reason, the Executive shall have no rights or claims against the Company except to receive the payments and benefits described in Section 6(a).

(c) Termination by the Company Without Cause or by the Executive with Good Reason.  If the Company terminates the Executive’s employment without Cause pursuant to Section 5(b), or the Executive terminates employment with Good

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Reason pursuant to Section 5(c), the Executive shall be entitled to receive, in addition to the items referenced in Section 6(a), the following:

(i)        continued payment of the Base Salary, at the rate in effect on the last day of employment (but in no event in an annual amount less than as set forth in Section 4(a)), for a period of twelve (12) months.  Such amount shall be paid in approximately equal installments on the Company’s regularly scheduled payroll dates, subject to all legally required payroll deductions and withholdings for sums owed by the Executive to the Company;

(ii)       continued payment by the Company for the Executive’s life and health insurance coverage for twelve (12) months (the “Continuation Period”) to the same extent that the Company paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage; provided that if continued payment by the Company of the Executive’s health insurance coverage would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended, or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing such continued payment, the Company will instead pay the Executive on the first day of each month a fully taxable cash payment equal to the Company’s premiums for that month (the “Monthly Premium”) and a corresponding Tax Indemnity Payment (defined below), subject to applicable tax withholdings, for the remainder of the Continuation Period;

(iii)      payments equal to two (2) times the average Annual Bonus earned by the Executive over the two (2) calendar years preceding the year of termination (or if the Executive has not been employed for two (2) calendar years, payments equal to two (2) times the Executive’s Target Bonus for the year of termination).  By way of example only, if the Executive’s Annual Bonus over the preceding two (2) years was $300,000 and $0, the average would be $150,000 and the payment under this Section 6(c)(iii) would equal $300,000.  Such amount shall be paid to the Executive within ten (10) days after the end of the Restricted Period (as defined below);

(iv)      a pro rata portion of the Annual Bonus for the year of termination, as reasonably determined by the Company based upon the extent to which performance goals for the year of termination are achieved, which Annual Bonus, if any, shall be paid to Executive no later than March 15 of the year following the year in which such termination occurs; and

(v) immediate vesting as of the last day of employment in any unvested Time-Based Equity Awards (with any such awards that vest in whole or in part based on the attainment of performance-vesting conditions (“Performance-

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Based Equity Awards”) being governed by the terms of the applicable

award agreement).

None of the benefits described in this Section 6(c) (the “Severance Payments”) will be payable unless the Executive has signed a general release (in substantially the form attached hereto as Exhibit A) within forty five (45) days of date of termination, which has (and not until it has) become irrevocable, satisfactory to the Company in the reasonable exercise of its discretion, releasing the Company, its affiliates, and their directors, officers and employees, from any and all claims or potential claims arising from or related to the Executive’s employment or termination of employment.  The Severance Payments shall commence on the Company’s first regular payroll date occurring on or after the sixtieth (60^th) date following the date of termination (the “First Payroll Date”), with amounts otherwise payable under the Company’s normal payroll procedures prior to the First Payroll Date to be paid in lump sum on the First Payroll Date without interest thereon.

For purposes of Section 6(c)(ii), the “Tax Indemnity Payment” shall equal the aggregate amount of additional payments necessary to deliver to the Executive the Monthly Premium amount in full on a net after-tax basis with the amount of each such Tax Indemnity Payment to be based upon the Tax Rate in effect when the corresponding Monthly Premium amount is paid.  For the purposes of the foregoing, “Tax Rate” means the Executive’s current tax rate based upon the combined federal and state and local income, earnings, Medicare and any other tax rates applicable to the Executive, all at the highest marginal rates of taxation in the county and state of the Executive’s residence on the date of determination, net of the reduction in federal income taxes which could be obtained by deduction of such state and local taxes.

(d) Termination In the Event of Death, Disability or Retirement.  In the event of a termination of employment due to death, Disability or Retirement, the Executive shall be entitled to receive, in addition to the items referenced in Section 6(a), the following:

(i) a pro rata portion of the Annual Bonus for the year of termination, as reasonably determined by the Company based upon the extent to which performance goals for the year of termination are achieved, which Annual Bonus, if any, shall be paid to Executive (or Executive’s estate) no later than March 15 of the year following the year in which such termination occurs; and

(ii) immediate vesting as of the last day of employment in any unvested Time-Based Equity Awards (with any Performance-Based Equity Awards being governed by the terms of the applicable award agreement).

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7. Confidentiality

(a) Definition of Proprietary Information.  The Executive acknowledges that Executive may be furnished or may otherwise receive or have access to confidential information which relates to the Company’s past, present or future business activities, strategies, services or products, research and development; financial analysis and data; improvements, inventions, processes, techniques, designs or other technical data; profit margins and other financial information; fee arrangements; compilations for marketing or development; confidential personnel and payroll information; or other information regarding administrative, management, or financial activities of the Company, or of a third party which provided proprietary information to the Company on a confidential basis.  All such information, including in any electronic form, and including any materials or documents containing such information, shall be considered by the Company and the Executive as proprietary and confidential (the “Proprietary Information”).

(b) Exclusions.  Notwithstanding the foregoing, Proprietary Information shall not include information in the public domain not as a result of a breach of any duty by the Executive or any other person.

(c) Obligations.  Both during and after the Employment Period, the Executive agrees to preserve and protect the confidentiality of the Proprietary Information and all physical forms thereof, whether disclosed to Executive before this Agreement is signed or afterward.  In addition, the Executive shall not (i) disclose or disseminate the Proprietary Information to any third party, including employees of the Company (or its affiliates) without a legitimate business need to know during the Employment Period; (ii) remove the Proprietary Information from the Company’s premises without a valid business purpose; or (iii) use the Proprietary Information for Executive’s own benefit or for the benefit of any third party.

(d) Return of Proprietary Information.  The Executive acknowledges and agrees that all the Proprietary Information used or generated during the course of working for the Company is the property of the Company.  The Executive agrees to deliver to the Company all documents and other tangibles containing the Proprietary Information at any time upon request by the Company’s Board of Directors during Executive’s employment and immediately upon termination of Executive’s employment.

(e) Whistleblower and Trade Secret Protections. Notwithstanding anything to the contrary herein, nothing in this Agreement is intended to or will be used by the Company in any way to prohibit Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833,

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notwithstanding anything to the contrary in this Agreement: (A) Executive shall not be in breach of this Agreement and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (B) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

8. Noncompetition

(a) Restriction on Competition.  For the period of the Executive’s employment with the Company and for twelve (12) months following the expiration or termination of the Executive’s employment with the Company (the “Restricted Period”), the Executive agrees not to engage, directly or indirectly, as a manager, employee, consultant, partner, principal, agent, representative, or in any other individual or representative capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment, including but not limited to the multifamily finance business, where material is defined as fifteen percent (15%) of the gross revenues of the Company based on the most recent quarterly earnings.  Executive further agrees that for the period of the Executive’s employment with the Company and for the Restricted Period, the Executive will not engage, directly or indirectly, as an owner, director, trustee, member, stockholder, or in any other corporate capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment.  Notwithstanding the foregoing, the Executive shall not be deemed to have violated this Section 8(a) solely (i) by reason of Executive’s passive ownership of 1% or less of the outstanding stock of any publicly traded corporation or other entity, (ii) by providing legal, accounting or audit services as an employee or partner of a professional services organization or (iii) by providing services to any investment banking or other institution that do not relate to any material business that the Company conducts as of the date of the Executive’s termination of employment.

(b) Non-Solicitation of Clients.  During the Restricted Period, the Executive agrees not to solicit, directly or indirectly, on Executive’s own behalf or on behalf of any other person(s), any client of the Company to whom the Company had provided services at any time during the Executive’s employment with the Company in any line of business that the Company conducts as of the date of the Executive’s termination of employment or that the Company is actively soliciting, for the purpose of marketing or providing any service competitive with any service then offered by the Company.

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(c) Non-Solicitation of Employees.  During the Restricted Period, the Executive agrees that Executive will not, directly or indirectly, hire or attempt to hire or cause any business, other than an affiliate of the Company, to hire any person who is then or was at any time during the preceding six (6) months an employee of the Company and who is at the time of such hire or attempted hire, or was at the date of such employee’s separation from the Company a vice president, senior vice president or executive vice president or other senior executive employee of the Company.

(d) Acknowledgement.  The Executive acknowledges that Executive will acquire much Proprietary Information concerning the past, present and future business of the Company as the result of Executive’s employment, as well as access to the relationships between the Company and its clients and employees.  The Executive further acknowledges that the business of the Company is very competitive and that competition by Executive in that business during Executive’s employment, or after Executive’s employment terminates, would severely injure the Company.  The Executive understands and agrees that the restrictions contained in this Section 8 are reasonable and are required for the Company’s legitimate protection, and do not unduly limit Executive’s ability to earn a livelihood.

(e) Rights and Remedies upon Breach.  The Executive acknowledges and agrees that any breach by Executive of any of the provisions of Sections 7 and 8 (the “Restrictive Covenants”) would result in irreparable injury and damage for which money damages would not provide an adequate remedy.  Therefore, if the Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company and its affiliates, including the Company, shall have the following rights and remedies, each of which rights and remedies shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company and its affiliates, including the Company, under law or in equity (including, without limitation, the recovery of damages):

(i) The right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages) by any court of competent jurisdiction, including, without limitation, the right to an entry against the Executive of restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of such covenants; and

(ii) The right and remedy to require the Executive to account for and pay over to the Company and its affiliates all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by Executive as the result of any transactions constituting a breach of the Restrictive Covenants, and the Executive shall account for and pay over such Benefits to the Company and, if applicable, its affected affiliates.

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(f) Without limiting Section 13(j), if any court or other decision-maker of competent jurisdiction determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

9. Executive Representation

The Executive represents and warrants to the Company that Executive is not now under any obligation of a contractual or other nature to any person, business or other entity which is inconsistent or in conflict with this Agreement or which would prevent Executive from performing Executive’s obligations under this Agreement.

10. Mediation and Arbitration

(a) Except as provided in Section 10(b), any disputes between the Company and the Executive in any way concerning the Executive’s employment, the termination of Executive’s employment, this Agreement or its enforcement shall be subject to mediation.  If the Company and the Executive cannot agree upon a mediator, each shall select one name from a list of mediators maintained by any bona fide dispute resolution provider or other private mediator; the two selected shall then choose a third person who will serve as the sole mediator. The first mediation session shall occur within forty-five (45) calendar days following the notice of a dispute.  If within sixty (60) days of the first mediation session the claim is not resolved, either party may request that the dispute be settled exclusively by arbitration in the state of Maryland by a single arbitrator, selected in the same manner as the mediator, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, any or all of the following courts have jurisdiction:  (i) the United States District Court for the Fourth Circuit, (ii) any of the courts of the State of Maryland, or (iii) any other court having jurisdiction.  Any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive waive to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  A judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its costs and expenses arising in connection with any arbitration proceeding.

(b) Notwithstanding the foregoing, the Company, in its sole discretion, may bring an action in any court of competent jurisdiction to seek injunctive relief and such other relief as the Company shall elect to enforce the Restrictive Covenants.  If the courts

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of any one or more of such jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of breadth of scope or otherwise it is the intention of the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided in Section 8(e) above in the courts of any other jurisdiction within the geographical scope of such Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective jurisdictions, such Restrictive Covenants as they relate to each jurisdiction being, for this purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine of res judicata.  The parties hereby agree to waive any right to a trial by jury for any and all disputes hereunder (whether or not relating to the Restrictive Covenants).

11. Section 409A.

To the extent the Executive would be subject to the additional twenty percent (20%) tax imposed on certain deferred compensation arrangements pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and preserve to the maximum extent possible the original intent and economic benefit to the Executive and the Company, and the parties shall promptly execute any amendment reasonably necessary to implement this Section 11.

(a) For purposes of Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement including, without limitation, each severance payment and health insurance payment shall be treated as a right to receive a series of separate and distinct payments.

(b) The Executive will be deemed to have a date of termination for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A

(c) Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6) month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six (6) month period (or upon the Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.   To the extent that any benefits to be provided during the Delay Period are

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considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

(d) (A) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (B) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (C) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

(e) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

12. Clawback Policies

The Executive is subject to any recoupment or clawback policies that the Company may implement or maintain at any time regarding incentive-based compensation, which is granted or awarded to Executive on or after the date of this Agreement.  Such policies may include the right to recover incentive-based compensation (including equity or equity-based awards granted as compensation) awarded or received during the three-year period preceding the date on which the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under federal securities laws.  The Executive agrees to amend any awards and agreements entered into on or after the date of this Agreement as the Company may request to reasonably implement its policies.

13. Miscellaneous

(a) Notices.  All notices required or permitted under this Agreement shall be in writing and shall be deemed effective (i) upon personal delivery, (ii) upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid, or (iii) in the case of facsimile transmission or delivery by nationally recognized overnight delivery service, when received, addressed as follows:

(b) If to the Company, to:

Walker & Dunlop, Inc.

7272 Wisconsin Avenue

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Suite 1300

Bethesda, MD 20814

Attention: General Counsel

(i) If to the Executive, to:

Gregory A. Florkowski

Address on file with the Company

or to such other address or addresses as either party shall designate to the other in writing from time to time by like notice.

(c) Pronouns.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

(d) Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

(e) Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive, which amendment or modification is consented to by the Company.

(f) Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Maryland, without regard to its conflicts of laws principles.

(g) Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any entity with which or into which the Company may be merged or which may succeed to its assets or business or any entity to which the Company may assign its rights and obligations under this Agreement; provided, however, that the obligations of the Executive are personal and shall not be assigned or delegated by the Executive.

(h) Waiver.  No delays or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent by the Company shall not be effective unless consented to by the Company.  A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

(i) Captions.  The captions appearing in this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

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(j) Severability.  In case any provision of this Agreement shall be held by a court or arbitrator with jurisdiction over the parties to this Agreement to be invalid, illegal or otherwise unenforceable, such provision shall be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

(k) Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

WALKER & DUNLOP, INC.
By:	/s/ William M. Walker
Name:	William M. Walker
Title:	Chairman and Chief Executive Officer
/s/ Gregory A. Florkowski
Gregory A. Florkowski
May 4, 2022
Date

Exhibit A

WAIVER AND RELEASE AGREEMENT

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [_____________] (the “Effective Date”), by Gregory A. Florkowski (“Executive”) in consideration of severance pay (the “Severance Payment”) provided to Executive by Walker & Dunlop, Inc., a Maryland corporation (the “Company”), pursuant to the Employment Agreement by and between the Company and Executive (the “Employment Agreement”).

1.Waiver and Release.  Subject to the last sentence of the first paragraph of this Section 1, Executive, on Executive’s own behalf and on behalf of Executive’s heirs, executors, administrators, attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever discharges the Company and each of its affiliates, parents, successors, predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “Employer”), from any and all causes of action, claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of Executive’s signing of this Release, concerning Executive’s employment or separation from employment.  Subject to the last sentence of the first paragraph of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws whatsoever as may be created or amended from time to time); any claim arising under any state or local laws, ordinances or regulations (including, but not limited to, any state or local laws, ordinances or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy or loss of consortium.  Notwithstanding any other provision of this Release to the contrary, this Release does not encompass, and Executive does not release, waive or discharge, the obligations of the Company (a) to make the payments and provide the other benefits contemplated by Section 6(a) and Section 6(c) of the Employment Agreement, or (b) with respect to Executive’s ownership of vested equity securities of the Company, or (c) under any indemnification or similar agreement with Executive or indemnification under the Articles of Incorporation, Bylaws or other governing instruments of the Company.

Executive understands that by signing this Release, Executive is not waiving any claims or administrative charges which cannot be waived by law.  Executive is waiving, however, any right to monetary recovery or individual relief should any federal, state or local agency (including the Equal Employment Opportunity Commission) pursue any claim on

Executive’s behalf arising out of or related to Executive’s employment with and/or separation from employment with the Company.

Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Release.

2.Acknowledgments.  Executive is signing this Release knowingly and voluntarily.  Executive acknowledges that:

(a)Executive is hereby advised in writing to consult an attorney before signing this Release;

(b)Executive has relied solely on Executive’s own judgment and/or that of Executive’s attorney regarding the consideration for and the terms of this Release and is signing this Release knowingly and voluntarily of Executive’s own free will;

(c)Executive is not entitled to the Severance Payment unless Executive agrees to and honors the terms of this Release;

(d)Executive has been given at least twenty-one (21) calendar days to consider this Release, or Executive expressly waives the right to have at least twenty-one (21) days to consider this Release;

(e)Executive may revoke this Release within seven (7) calendar days after signing it by submitting a written notice of revocation to the Employer.  Executive further understands that this Release is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if Executive revokes this Release within the seven (7) day revocation period, Executive will not receive the Severance Payment;

(f)Executive has read and understands the Release and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen or unforeseen claims presently asserted or otherwise arising through the date of signing of this Release that Executive may have against the Employer; and

(g)No statements made or conduct by the Employer has in any way coerced or unduly influenced Executive to execute this Release.

3.No Admission of Liability.  This Release does not constitute an admission of liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any wrongdoing whatsoever against the Executive, and the Employer expressly denies that any wrongdoing has occurred.

4.Entire Agreement.  There are no other agreements of any nature between the Employer and Executive with respect to the matters discussed in this Release, except as expressly stated herein, and in signing this Release, Executive is not relying on any agreements or representations, except those expressly contained in this Release.

5.Execution.  It is not necessary that the Employer sign this Release following Executive’s full and complete execution of it for it to become fully effective and enforceable.

6.Severability.  If any provision of this Release is found, held or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or controlling law, the remainder of this Release shall continue in full force and effect.

7.Governing Law.  This Release shall be governed by the laws of the State of Maryland, excluding the choice of law rules thereof.

8.Headings.  Section and subsection headings contained in this Release are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Release for any purpose, and they shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year first herein above written.

EXECUTIVE:

Gregory A. Florkowski

EX-10.3

Exhibit 10.3

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of May 4, 2022, by and among Walker & Dunlop, Inc., a Maryland corporation (the “Company” or the “Indemnitor”) and Gregory A. Florkowski (the “Indemnitee”).

WHEREAS, the Indemnitee is an officer of the Company and in such capacity is performing a valuable service for the Company;

WHEREAS, Maryland law permits the Company to enter into contracts with its officers or members of its Board of Directors with respect to indemnification of, and advancement of expenses to, such persons;

WHEREAS, the Articles of Amendment and Restatement of the Company (the “Charter”) provide that the Company shall indemnify and advance expenses to its directors and officers to the maximum extent permitted by Maryland law in effect from time to time;

WHEREAS, the Amended and Restated Bylaws of the Company (the “Bylaws”) provide that each director and officer of the Company shall be indemnified by the Company to the maximum extent permitted by Maryland law in effect from time to time and shall be entitled to advancement of expenses consistent with Maryland law; and

WHEREAS, to induce the Indemnitee to provide services to the Company as an officer of the Company, and to provide the Indemnitee with specific contractual assurance that indemnification will be available to the Indemnitee regardless of, among other things, any amendment to or revocation of the Charter or the Bylaws, or any acquisition transaction relating to the Company, the Indemnitor desires to provide the Indemnitee with protection against personal liability as set forth herein.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Indemnitor and the Indemnitee hereby agree as follows:

1. DEFINITIONS

For purposes of this Agreement:

(A) “Change in Control” shall have the definition set forth in the Walker & Dunlop, Inc. 2020 Equity Incentive Plan.

(B) “Corporate Status” describes the status of a person who is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, partner (limited or general), member, director, employee or agent of any other foreign or domestic corporation, partnership, joint venture, limited liability company, trust, other enterprise (whether conducted for profit or not for profit) or employee benefit plan. The Company shall be deemed to have requested the Indemnitee to serve an employee benefit plan where the performance of the

Indemnitee’s duties to the Company also imposes or imposed duties on, or otherwise involves or involved services by, the Indemnitee to the plan or participants or beneficiaries of the plan.

(C) “Expenses” shall include all attorneys’ and paralegals’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(D) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any formal or informal internal investigation to which the Indemnitee is made a party by reason of the Corporate Status of the Indemnitee), administrative hearing, or any other proceeding, including appeals therefrom, whether civil, criminal, administrative, or investigative, except one initiated by the Indemnitee pursuant to paragraph 8 of this Agreement to enforce such Indemnitee’s rights under this Agreement.

(E) “Special Legal Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently is, or in the past two years has been, retained to represent (i) the Indemnitor or the Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

2. INDEMNIFICATION

The Indemnitee shall be entitled to the rights of indemnification provided in this paragraph 2 and under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders or resolution of the Board of Directors or otherwise if, by reason of such Indemnitee’s Corporate Status, such Indemnitee is, or is threatened to be made, a party to any threatened, pending, or completed Proceeding, including a Proceeding by or in the right of the Company. Unless prohibited by paragraph 13 hereof and subject to the other provisions of this Agreement, the Indemnitee shall be indemnified hereunder, to the maximum extent permitted by Maryland law in effect from time to time, against judgments, penalties, fines and settlements and reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with such Proceeding or any claim, issue or matter therein; provided, however, that if such Proceeding was initiated by or in the right of the Company, indemnification may not be made in respect of such Proceeding if the Indemnitee shall have been finally adjudged to be liable to the Company. For purposes of this paragraph 2, excise taxes assessed on the Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.

3. INDEMNIFICATION FOR EXPENSES IN CERTAIN CIRCUMSTANCES

(A) To the extent that the Indemnitee is successful, on the merits or otherwise, in any Proceeding to which the Indemnitee could have been entitled to indemnification

pursuant to paragraph 2, such Indemnitee shall be indemnified against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with the Proceeding.

(B) If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues, or matters in such Proceeding, the Indemnitor shall indemnify the Indemnitee against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with each successfully resolved claim, issue or matter.

(C) For purposes of this paragraph (3) and without limitation, the termination of any claim, issue or matter in such Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

4. ADVANCEMENT OF EXPENSES

Notwithstanding anything in this Agreement to the contrary, but subject to paragraph 13 hereof, if the Indemnitee is or was or becomes a party to or is otherwise involved in any Proceeding (including as a witness), or is or was threatened to be made a party to or a participant (including as a witness) in any such Proceeding, by reason of the Indemnitee’s Corporate Status, or by reason of (or arising in part out of) any actual or alleged event or occurrence related to the Indemnitee’s Corporate Status, or by reason of any actual or alleged act or omission on the part of the Indemnitee taken or omitted in or relating to the Indemnitee’s Corporate Status, then the Indemnitor shall advance all reasonable Expenses incurred by the Indemnitee in connection with any such Proceeding within twenty (20) days after the receipt by the Indemnitor of a statement from the Indemnitee requesting such advance from time to time, whether prior to or after final disposition of such Proceeding; provided that, such statement shall reasonably evidence the Expenses incurred or to be incurred by the Indemnitee and shall include or be preceded or accompanied by (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Indemnitor as authorized by this Agreement has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that the standard of conduct has not been met. The undertaking required by clause (ii) of the immediately preceding sentence shall be an unlimited general obligation of the Indemnitee but need not be secured and may be accepted without reference to financial ability to make the repayment.

5. WITNESS EXPENSES

Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of such Indemnitee’s Corporate Status, a witness for any reason in any Proceeding to which such Indemnitee is not a named defendant or respondent, such Indemnitee shall be indemnified by the Indemnitor against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection therewith.

6. DETERMINATION OF ENTITLEMENT TO AND AUTHORIZATION OF INDEMNIFICATION

(A) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Indemnitor a written request, including therewith such documentation and information reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.

(B) Indemnification under this Agreement may not be made unless authorized for a specific Proceeding after a determination has been made in accordance with this paragraph 6(B) that indemnification of the Indemnitee is permissible in the circumstances because the Indemnitee has met the following standard of conduct: the Indemnitor shall indemnify the Indemnitee in accordance with the provisions of paragraph 2 hereof, unless it is established that: (a) the act or omission of the Indemnitee was material to the matter giving rise to the Proceeding and (x) was committed in bad faith or (y) was the result of active and deliberate dishonesty; (b) the Indemnitee actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Upon receipt by the Indemnitor of the Indemnitee’s written request for indemnification pursuant to subparagraph 6(A), a determination as to whether the applicable standard of conduct has been met shall be made within the period specified in paragraph 6(E) by: (i) if a Change in Control shall have occurred, Special Legal Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee, with Special Legal Counsel selected by the Indemnitee (the Indemnitee shall give prompt written notice to the Indemnitor advising the Indemnitor of the identity of the Special Legal Counsel so selected); or (ii) if a Change in Control shall not have occurred, (A) the Board of Directors by a majority vote of a quorum consisting of directors not, at the time, parties to the Proceeding, or, if such quorum cannot be obtained, then by a majority vote of a committee of the Board of Directors consisting solely of two or more directors not, at the time, parties to such Proceeding and who were duly designated to act in the matter by a majority vote of the full Board of Directors in which the designated directors who are parties may participate, (B) if the requisite quorum of the full Board of Directors cannot be obtained therefor and the committee cannot be established (or, even if such quorum is obtainable or such committee can be established, if such quorum or committee so directs), Special Legal Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, with Special Legal Counsel selected by the Board of Directors or a committee of the Board of Directors by vote as set forth in clause (ii)(A) of this paragraph 6(B) (or, if the requisite quorum of the full Board of Directors cannot be obtained therefor and the committee cannot be established, by a majority of the full Board of Directors in which directors who are parties to the Proceeding may participate) (if the Indemnitor selects Special Legal Counsel to make the determination under this clause (ii), the Indemnitor shall give prompt written notice to the Indemnitee advising him or her of the identity of the Special Legal Counsel so selected) or (C) if so directed by a majority of the

members of the Board of Directors, the stockholders of the Company. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten (10) days after such determination. Authorization of indemnification and determination as to reasonableness of Expenses shall be made in the same manner as the determination that indemnification is permissible. However, if the determination that indemnification is permissible is made by Special Legal Counsel under clause (ii)(B) above, authorization of indemnification and determination as to reasonableness of Expenses shall be made in the manner specified under clause (ii)(B) above for the selection of such Special Legal Counsel.

(C) The Indemnitee shall cooperate with the person or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating shall be borne by the Indemnitor (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Indemnitor hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.

(D) In the event the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to paragraph 6(B) hereof, the Indemnitee, or the Indemnitor, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Indemnitor or to the Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the grounds that the Special Legal Counsel so selected does not meet the requirements of “Special Legal Counsel” as defined in paragraph 1 of this Agreement. If such written objection is made, the Special Legal Counsel so selected may not serve as Special Legal Counsel until a court has determined that such objection is without merit. If, within twenty (20) days after submission by the Indemnitee of a written request for indemnification pursuant to paragraph 6(A) hereof, no Special Legal Counsel shall have been selected or, if selected, shall have been objected to, either the Indemnitor or the Indemnitee may petition a court for resolution of any objection which shall have been made by the Indemnitor or the Indemnitee to the other’s selection of Special Legal Counsel and/or for the appointment as Special Legal Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Special Legal Counsel under paragraph 6(B) hereof. The Indemnitor shall pay all reasonable fees and expenses of Special Legal Counsel incurred in connection with acting pursuant to paragraph 6(B) hereof, and all reasonable fees and expenses incident to the selection of such Special Legal Counsel pursuant to this paragraph 6(D). In the event that a determination of entitlement to indemnification is to be made by Special Legal Counsel and such determination shall not have been made and

delivered in a written opinion within ninety (90) days after the receipt by the Indemnitor of the Indemnitee’s request in accordance with paragraph 6(A), upon the due commencement of any judicial proceeding in accordance with paragraph 8(A) of this Agreement, Special Legal Counsel shall be discharged and relieved of any further responsibility in such capacity.

(E) The person or entity making the determination whether the Indemnitee is entitled to indemnification will make the determination of Indemnitee’s entitlement to indemnification within forty-five (45) days after the later of the receipt by the Indemnitor of the request therefor or the final resolution of the Proceeding. Such 45-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person or entity making said determination in good faith requires additional time for the obtaining or evaluating of documentation and/or information relating thereto. The foregoing provisions of this paragraph 6(E) shall not apply: (i) if the determination of entitlement to indemnification is to be made by the stockholders and if within fifteen (15) days after receipt by the Indemnitor of the request for such determination the Board of Directors resolves to submit such determination to the stockholders for consideration at an annual or special meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made at such meeting, or (ii) if the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to paragraph 6(B) of this Agreement.

7. PRESUMPTIONS

(A) In making a determination with respect to entitlement or authorization of indemnification hereunder, the person or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement and the Indemnitor shall have the burden of proof to overcome such presumption.

(B) The termination of any Proceeding by conviction, or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

8. REMEDIES

(A) In the event that: (i) a determination is made in accordance with the provisions of paragraph 6 that the Indemnitee is not entitled to indemnification under this Agreement, or (ii) advancement of reasonable Expenses is not timely made pursuant to this Agreement, or (iii) payment of indemnification due the Indemnitee under this Agreement is not timely made, the Indemnitee shall be entitled to an adjudication in an appropriate court of competent jurisdiction of such Indemnitee’s entitlement to such indemnification or advancement of Expenses.

(B) In the event that a determination shall have been made pursuant to paragraph 6 of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this paragraph 8 shall be conducted in all respects as a de novo trial on the merits. The fact that a determination had been made earlier pursuant to paragraph 6 of this Agreement that the Indemnitee was not entitled to indemnification shall not be taken into account in any judicial proceeding commenced pursuant to this paragraph 8 and the Indemnitee shall not be prejudiced in any way by reason of that adverse determination. In any judicial proceeding commenced pursuant to this paragraph 8, the Indemnitor shall have the burden of proving that the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(C) If a determination shall have been made or deemed to have been made pursuant to this Agreement that the Indemnitee is entitled to indemnification, the Indemnitor shall be bound by such determination in any judicial proceeding commenced pursuant to this paragraph 8, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(D) The Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this paragraph 8 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Indemnitor is bound by all the provisions of this Agreement.

(E) In the event that the Indemnitee, pursuant to this paragraph 8, seeks a judicial adjudication of such Indemnitee’s rights under, or to recover damages for breach of, this Agreement, if successful on the merits or otherwise as to all or less than all claims, issues or matters in such judicial adjudication, the Indemnitee shall be entitled to recover from the Indemnitor, and shall be indemnified by the Indemnitor against, any and all reasonable Expenses actually incurred by such Indemnitee in connection with each successfully resolved claim, issue or matter.

9. NOTIFICATION AND DEFENSE OF CLAIMS

The Indemnitee agrees promptly to notify the Indemnitor in writing upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder, but the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability that the Indemnitor may have to Indemnitee under this Agreement unless the Indemnitor is materially prejudiced thereby. With respect to any such Proceeding as to which Indemnitee notifies the Indemnitor of the commencement thereof:

(A) The Indemnitor will be entitled to participate therein at its own expense.

(B) Except as otherwise provided below, the Indemnitor will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Indemnitor to Indemnitee of the Indemnitor’s election to assume the defense thereof, the Indemnitor will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but the fees and disbursements of such counsel incurred after notice from the Indemnitor of the Indemnitor’s assumption of the defense thereof shall be at the expense of Indemnitee unless (a) the employment of counsel by the Indemnitee has been authorized by the Indemnitor, (b) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense of such action, (c) such Proceeding seeks penalties or other relief against the Indemnitee with respect to which the Indemnitor could not provide monetary indemnification to the Indemnitee (such as injunctive relief or incarceration) or (d) the Indemnitor shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and disbursements of counsel shall be at the expense of the Indemnitor. The Indemnitor shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Indemnitor, or as to which the Indemnitee shall have reached the conclusion specified in clause (b) above, or which involves penalties or other relief against the Indemnitee of the type referred to in clause (c) above.

(C) The Indemnitor shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Indemnitor’s written consent. The Indemnitor shall not settle any action or claim in any manner that would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Indemnitor nor Indemnitee will unreasonably withhold or delay consent to any proposed settlement.

10. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION

(A) The rights of indemnification and to receive advancement of reasonable Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders, a resolution of the Board of Directors or otherwise, except that any payments otherwise required to be made by the Indemnitor hereunder shall be offset by any and all amounts received by the Indemnitee from any other indemnitor or under one or more liability insurance policies maintained by an indemnitor or otherwise and shall not be duplicative of any other payments received by an Indemnitee from the Indemnitor in respect of the matter giving rise to the indemnity hereunder; provided, however, that if indemnification rights are provided by an Additional Indemnitor as defined in Section 18(B) hereof, such Section shall govern. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to the

Indemnitee with respect to any action taken or omitted by the Indemnitee prior to such amendment, alteration or repeal.

(B) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors and officers of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available and upon any “Change in Control” the Company shall use commercially reasonable efforts to obtain or arrange for continuation and/or “tail” coverage for the Indemnitee to the maximum extent obtainable at such time.

(C) Except as otherwise provided in Section 18(B) hereof, in the event of any payment under this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all actions necessary to secure such rights, including execution of such documents as are necessary to enable the Indemnitor to bring suit to enforce such rights.

(D) Except as otherwise provided in Section 18(B) hereof, the Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement, or otherwise.

11. CONTINUATION OF INDEMNITY

(A) All agreements and obligations of the Indemnitor contained herein shall continue during the period the Indemnitee is an officer or a member of the Board of Directors of the Company and shall continue thereafter so long as the Indemnitee shall be subject to any threatened, pending or completed Proceeding by reason of such Indemnitee’s Corporate Status and during the period of statute of limitations for any act or omission occurring during the Indemnitee’s term of Corporate Status. This Agreement shall be binding upon the Indemnitor and its respective successors and assigns and shall inure to the benefit of the Indemnitee and such Indemnitee’s heirs, executors and administrators.

(B) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

12. SEVERABILITY

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provisions held invalid, illegal or unenforceable.

13. EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES

Notwithstanding any other provisions of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of reasonable Expenses under this Agreement with respect to (i) any Proceeding initiated by such Indemnitee against the Indemnitor other than a proceeding commenced pursuant to paragraph 8 hereof, or (ii) any Proceeding for an accounting of profits arising from the purchase and sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, rules and regulations promulgated thereunder, or any similar provisions of any federal, state or local statute.

14. NOTICE TO THE COMPANY STOCKHOLDERS

Any indemnification of, or advancement of reasonable Expenses, to an Indemnitee in accordance with this Agreement, if arising out of a Proceeding by or in the right of the Company, shall be reported in writing to the stockholders of the Company with the notice of the next Company stockholders’ meeting or prior to the meeting.

15. HEADINGS

The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

16. MODIFICATION AND WAIVER

No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17. NOTICES

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and received by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or

registered mail with postage prepaid, on the third business day after the date on which it is so mailed, if so delivered or mailed, as the case may be, to the following addresses:

If to the Indemnitee, to the address set forth in the records of the Company.

If to the Indemnitor, to:

Walker & Dunlop, Inc.

7272 Wisconsin Avenue

Suite 1300

Bethesda, MD 20814

Attention: Executive Vice President, General Counsel & Secretary

Fax No.: (301) 500-1223

or to such other address as may have been furnished to the Indemnitee by the Indemnitor or to the Indemnitor by the Indemnitee, as the case may be.

18. CONTRIBUTION

(A) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, penalties, fines and settlements and reasonable expenses actually incurred by or on behalf of an Indemnitee, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

(B) The Company acknowledges and agrees that as between the Company and any other entity that has provided indemnification rights in respect of Indemnitee’s service as a director of the Company at the request of such entity (an “Additional Indemnitor”), the Company shall be primarily liable to Indemnitee as set forth in this Agreement for any indemnification claim (including, without limitation, any claim for advancement of Expenses) by Indemnitee in respect of any Proceeding for which Indemnitee is entitled to indemnification hereunder. In the event the Additional Indemnitor is liable to any extent to Indemnitee by virtue of indemnification rights provided by the Additional Indemnitor to Indemnitee in respect of Indemnitee’s service on the Board at the request of the Additional Investor and Indemnitee is also entitled to indemnification under this Agreement (including, without limitation, for advancement of Expenses) as a result of any Proceeding, the Company shall pay, in the first instance, the entire amount of any indemnification claim (including, without limitation, any claim for advancement of Expenses) brought by the Indemnitee against the Company under this Agreement

(including, without limitation, any claim for advancement of Expenses) without requiring the Additional Indemnitor to contribute to such payment and the Company hereby waives and relinquishes any right of contribution, subrogation or any other right of recovery of any kind it may have against the Additional Indemnitor in respect thereof. The Company further agrees that no advancement or payment by the Additional Indemnitor on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Additional Indemnitor shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.

19. GOVERNING LAW

The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without application of the conflict of laws principles thereof.

20. NO ASSIGNMENTS

The Indemnitee may not assign its rights or delegate obligations under this Agreement without the prior written consent of the Indemnitor. Any assignment or delegation in violation of this paragraph 20 shall be null and void.

21. NO THIRD PARTY RIGHTS

Except for the rights of an Additional Indemnitor under paragraph 18(B) hereof: (a), nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement; and (b) this Agreement and all of its provisions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

22. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute an agreement binding on all of the parties hereto.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

WALKER & DUNLOP, INC.
By:	/s/ Richard M. Lucas
Name:	Richard M. Lucas
Title:	EVP, General Counsel & Secretary
INDEMNITEE:
By:	/s/ Gregory A. Florkowski
Name:	Gregory A. Florkowski

EX-10.4

Exhibit 10.4

WALKER & DUNLOP, INC.

NON-EXECUTIVE DIRECTOR COMPENSATION RATES

(effective May 5, 2022)

The board of directors (the “Board”) of Walker & Dunlop, Inc. (the “Company”), adopted new compensation retainer rates for the Company’s non-employee Board members effective following the election of Board members at the Company’s May 5, 2022 annual meeting of stockholders.

The following represents a summary of the current annual retainer rates for non-employee Board members as well as for committee member and chairperson service and the Lead Director:

Compensation Component	Rate
Annual Retainer	$100,000 in cash, $150,000 in restricted stock(1)
Committee Chair Cash Retainers (2)	Audit-$25,000 Compensation-$25,000 Nominating & Corporate Governance-$15,000
Committee Member Cash Retainers	Audit-$10,000 Compensation-$10,000 Nominating & Corporate Governance-$10,000
Lead Director Annual Cash Retainer	$30,000

The Company also reimburses each of its directors for their travel expenses incurred in connection with their attendance at full Board and committee meetings.

(1) The restricted stock vests on the one-year anniversary of the date of grant, subject to the non-executive director’s continued service on the Board

(2) Committee chairpersons will receive the Committee Chair Cash Retainer in lieu of a Committee Member Cash Retainer for service on the committee they chair.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William M. Walker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2022	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory A. Florkowski, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2022	By:	/s/ Gregory A. Florkowski
		Gregory A. Florkowski
		Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Walker & Dunlop, Inc. for the quarterly period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of Walker & Dunlop, Inc., hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Walker & Dunlop, Inc.

Date: August 4, 2022	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer
Date: August 4, 2022	By:	/s/ Gregory A. Florkowski
		Gregory A. Florkowski
		Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Jul. 28, 2022
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Entity File Number	001-35000
Entity Registrant Name	Walker & Dunlop, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	80-0629925
Entity Address, Address Line One	7272 Wisconsin Avenue, Suite 1300
Entity Address, City or Town	Bethesda
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20814
City Area Code	301
Local Phone Number	215-5500
Title of 12(b) Security	Common Stock, $0.01 Par Value Per Share
Trading Symbol	WD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,030,266
Entity Central Index Key	0001497770
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Assets
Cash and cash equivalents	$ 151,252	$ 305,635
Restricted cash	34,361	42,812
Pledged securities, at fair value	149,560	148,996
Loans held for sale, at fair value	931,516	1,811,586
Loans held for investment, net	247,243	269,125
Mortgage servicing rights	978,745	953,845
Goodwill	937,881	698,635
Other intangible assets	207,024	183,904
Derivative assets	59,810	37,364
Receivables, net	236,786	212,019
Committed investments in tax credit equity	187,393	177,322
Other assets	413,201	364,746
Total assets	4,534,772	5,205,989
Liabilities
Warehouse notes payable	1,125,677	1,941,572
Note payable	719,210	740,174
Allowance for risk-sharing obligations	48,475	62,636
Derivative liabilities	17,176	6,403
Commitments to fund investments in tax credit equity	173,740	162,747
Other liabilities	784,719	714,250
Total liabilities	2,868,997	3,627,782
Equity
Preferred stock (authorized 50,000 shares; none issued)
Common stock ($0.01 par value; authorized 200,000 shares; issued and outstanding 32,322 shares at June 30, 2022 and 32,049 shares at December 31, 2021)	323	320
Additional paid-in capital ("APIC")	403,668	393,022
Accumulated other comprehensive income ("AOCI")	(222)	2,558
Retained earnings	1,229,712	1,154,252
Total stockholders' equity	1,633,481	1,550,152
Noncontrolling interests	32,294	28,055
Total equity	1,665,775	1,578,207
Commitments and contingencies (NOTES 2 and 9)
Total liabilities and equity	$ 4,534,772	$ 5,205,989

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Preferred shares, authorized	50,000	50,000
Preferred shares, issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	200,000	200,000
Common stock, issued	32,322	32,049
Common stock, outstanding	32,322	32,049

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues
Total revenues	$ 340,848	$ 281,411	$ 660,292	$ 505,699
Expenses
Personnel	168,368	141,421	312,549	237,636
Amortization and depreciation	61,103	48,510	117,255	95,381
Provision (benefit) for credit losses	(4,840)	(4,326)	(14,338)	(15,646)
Interest expense on corporate debt	6,412	1,760	12,817	3,525
Other operating expenses	36,195	19,748	68,409	37,335
Total expenses	267,238	207,113	496,692	358,231
Income from operations	73,610	74,298	163,600	147,468
Income tax expense	19,503	18,240	38,963	33,358
Net income before noncontrolling interests	54,107	56,058	124,637	114,110
Less: net income (loss) from noncontrolling interests	(179)		(858)
Walker and Dunlop net income	54,286	56,058	125,495	114,110
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes	(1,810)	768	(2,780)	610
Walker and Dunlop comprehensive income	$ 52,476	$ 56,826	$ 122,715	$ 114,720
Basic earnings per share (NOTE 10)	$ 1.63	$ 1.75	$ 3.77	$ 3.57
Diluted earnings per share (NOTE 10)	$ 1.61	$ 1.73	$ 3.73	$ 3.52
Basic weighted average shares outstanding	32,388	31,019	32,304	30,922
Diluted weighted average shares outstanding	32,694	31,370	32,657	31,322
Loan origination and debt brokerage fees, Net
Revenues
Total revenues	$ 102,605	$ 107,472	$ 184,915	$ 183,351
Fair value of expected net cash flows from servicing, net
Revenues
Total revenues	51,949	61,849	104,679	119,784
Servicing fees
Revenues
Total revenues	74,260	69,052	146,941	135,030
Property sales broker fees
Revenues
Total revenues	46,386	22,454	69,784	31,496
Investment management fees
Revenues
Total revenues	10,282	3,815	22,930	6,551
Net warehouse interest income
Revenues
Total revenues	5,268	4,630	10,041	9,185
Escrow earnings and other interest income
Revenues
Total revenues	6,751	1,823	8,554	3,940
Other revenue
Revenues
Total revenues	$ 43,347	$ 10,316	$ 112,448	$ 16,362

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Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	APIC	AOCI	Retained Earnings	Noncontrolling Interests	Total
Balances at the beginning of the period at Dec. 31, 2020	$ 307	$ 241,004	$ 1,968	$ 952,943		$ 1,196,222
Balance at the beginning of the period (in shares) at Dec. 31, 2020	30,678
Change in Stockholders' Equity
Walker and Dunlop net income				58,052		58,052
Other comprehensive income (loss), net of tax			(158)			(158)
Stock-based compensation - equity classified		7,836				7,836
Issuance of common stock in connection with equity compensation plans	$ 4	12,602				12,606
Issuance of common stock in connection with equity compensation plans (in shares)	430
Repurchase and retirement of common stock	$ (1)	(13,373)				(13,374)
Repurchase and retirement of common stock (in shares)	(131)
Cash dividends paid				(16,052)		(16,052)
Balances at the end of the period at Mar. 31, 2021	$ 310	248,069	1,810	994,943		1,245,132
Balance at the end of the period (in shares) at Mar. 31, 2021	30,977
Balances at the beginning of the period at Dec. 31, 2020	$ 307	241,004	1,968	952,943		1,196,222
Balance at the beginning of the period (in shares) at Dec. 31, 2020	30,678
Change in Stockholders' Equity
Walker and Dunlop net income						114,110
Balances at the end of the period at Jun. 30, 2021	$ 310	255,676	2,578	1,034,931		1,293,495
Balance at the end of the period (in shares) at Jun. 30, 2021	31,034
Balances at the beginning of the period at Mar. 31, 2021	$ 310	248,069	1,810	994,943		1,245,132
Balance at the beginning of the period (in shares) at Mar. 31, 2021	30,977
Change in Stockholders' Equity
Walker and Dunlop net income				56,058		56,058
Other comprehensive income (loss), net of tax			768			768
Stock-based compensation - equity classified		7,892				7,892
Issuance of common stock in connection with equity compensation plans	$ 1	530				531
Issuance of common stock in connection with equity compensation plans (in shares)	64
Repurchase and retirement of common stock	$ (1)	(815)				(816)
Repurchase and retirement of common stock (in shares)	(7)
Cash dividends paid				(16,070)		(16,070)
Balances at the end of the period at Jun. 30, 2021	$ 310	255,676	2,578	1,034,931		1,293,495
Balance at the end of the period (in shares) at Jun. 30, 2021	31,034
Balances at the beginning of the period at Dec. 31, 2021	$ 320	393,022	2,558	1,154,252	$ 28,055	1,578,207
Balances at the beginning of the period at Dec. 31, 2021						$ 1,550,152
Balance at the beginning of the period (in shares) at Dec. 31, 2021	32,049					32,049
Change in Stockholders' Equity
Walker and Dunlop net income				71,209		$ 71,209
Net income (loss) from noncontrolling interests					(679)	(679)
Other comprehensive income (loss), net of tax			(970)			(970)
Stock-based compensation - equity classified		10,812				10,812
Issuance of common stock in connection with equity compensation plans	$ 5	15,526				15,531
Issuance of common stock in connection with equity compensation plans (in shares)	544
Repurchase and retirement of common stock	$ (1)	(27,048)				(27,049)
Repurchase and retirement of common stock (in shares)	(195)
Cash dividends paid				(20,077)		(20,077)
Other equity activity (NOTE 10)		(5,303)			15,490	10,187
Balances at the end of the period at Mar. 31, 2022	$ 324	387,009	1,588	1,205,384	42,866	1,637,171
Balance at the end of the period (in shares) at Mar. 31, 2022	32,398
Balances at the beginning of the period at Dec. 31, 2021	$ 320	393,022	2,558	1,154,252	28,055	1,578,207
Balances at the beginning of the period at Dec. 31, 2021						$ 1,550,152
Balance at the beginning of the period (in shares) at Dec. 31, 2021	32,049					32,049
Change in Stockholders' Equity
Walker and Dunlop net income						$ 125,495
Net income (loss) from noncontrolling interests						(858)
Balances at the end of the period at Jun. 30, 2022	$ 323	403,668	(222)	1,229,712	32,294	1,665,775
Balances at the end of the period at Jun. 30, 2022						$ 1,633,481
Balance at the end of the period (in shares) at Jun. 30, 2022	32,322					32,322
Balances at the beginning of the period at Mar. 31, 2022	$ 324	387,009	1,588	1,205,384	42,866	$ 1,637,171
Balance at the beginning of the period (in shares) at Mar. 31, 2022	32,398
Change in Stockholders' Equity
Walker and Dunlop net income				54,286		54,286
Net income (loss) from noncontrolling interests					(179)	(179)
Other comprehensive income (loss), net of tax			(1,810)			(1,810)
Stock-based compensation - equity classified		9,980				9,980
Issuance of common stock in connection with equity compensation plans		110				110
Issuance of common stock in connection with equity compensation plans (in shares)	43
Repurchase and retirement of common stock	$ (1)	(2,409)		(9,892)		(12,302)
Repurchase and retirement of common stock (in shares)	(119)
Distributions to noncontrolling interest holders					(1,675)	(1,675)
Cash dividends paid				(20,066)		(20,066)
Other equity activity (NOTE 10)		8,978			(8,718)	260
Balances at the end of the period at Jun. 30, 2022	$ 323	$ 403,668	$ (222)	$ 1,229,712	$ 32,294	1,665,775
Balances at the end of the period at Jun. 30, 2022						$ 1,633,481
Balance at the end of the period (in shares) at Jun. 30, 2022	32,322					32,322

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
TOTAL EQUITY.
Cash dividends paid. amount per common share	$ 0.60	$ 0.60	$ 0.50	$ 0.50

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net income before noncontrolling interests	$ 124,637	$ 114,110
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gains attributable to the fair value of future servicing rights, net of guaranty obligation	(104,679)	(119,784)
Change in the fair value of premiums and origination fees	7,852	9,047
Amortization and depreciation	117,255	95,381
Provision (benefit) for credit losses	(14,338)	(15,646)
Gain from revaluation of previously held equity-method investment	(39,641)
Originations of loans held for sale	(8,805,659)	(7,293,128)
Proceeds from transfers of loans held for sale	9,637,859	8,024,903
Other operating activities, net	(69,417)	(55,541)
Net cash provided by (used in) operating activities	853,869	759,342
Cash flows from investing activities
Capital expenditures	(11,902)	(3,800)
Purchase of equity-method investments	(12,029)	(3,248)
Purchase of pledged available-for-sale ("AFS") securities	(46,395)	(2,000)
Proceeds from prepayment and sale of pledged AFS securities	6,101	22,092
Investments in joint ventures	(5,040)	(38,805)
Distributions from joint ventures	11,359	22,113
Acquisitions, net of cash acquired	(78,465)	(10,507)
Originations of loans held for investment	(49,057)	(116,087)
Principal collected on loans held for investment upon payoff	71,500	205,653
Net cash provided by (used in) investing activities	(113,928)	75,411
Cash flows from financing activities
Borrowings (repayments) of warehouse notes payable, net	(826,454)	(744,281)
Borrowings of interim warehouse notes payable	36,459	84,766
Repayments of interim warehouse notes payable	(26,000)	(34,174)
Repayments of notes payable	(21,244)	(1,490)
Repayments of secured borrowings		(73,312)
Proceeds from issuance of common stock	263	13,137
Repurchase of common stock	(39,380)	(14,190)
Cash dividends paid	(40,143)	(32,122)
Payment of contingent consideration	(17,612)
Distributions to noncontrolling interests	(1,675)
Debt issuance costs	(1,573)	(1,333)
Net cash provided by (used in) financing activities	(937,359)	(802,999)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2)	(197,418)	31,754
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	393,180	358,002
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	195,762	389,756
Supplemental Disclosure of Cash Flow Information:
Cash paid to third parties for interest	28,023	16,708
Cash paid for income taxes	$ 45,300	$ 26,723

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Supplemental Disclosure of Non-Cash Activity:
Issuance of common stock to settle compensation liabilities	$ 6,551	$ 9,589
Issuance of common stock to settle contingent consideration liabilities (NOTE 7)	8,750
Net increase (decrease) in total equity due to consolidations of tax credit entities (NOTE 10)	10,447
Net increase (decrease) in total assets due to consolidations of tax credit entities (NOTE 10)	13,700
Net increase (decrease) in total liabilities due to consolidations of tax credit entities (NOTE 10)	3,559
Forgiveness of a receivable the Company had with an acquired joint venture (NOTE 7)	5,460
Additions of contingent consideration liabilities from acquisitions (NOTE 7)	117,000	$ 7,504
Increase in Goodwill (NOTE 7)	$ 29,695

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ORGANIZATION AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2022

ORGANIZATION AND BASIS OF PRESENTATION

Organization and Basis of Presentation

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

These financial statements represent the condensed consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. The statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they may not include certain financial statement disclosures and other information required for annual financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results for the Company in the interim periods presented have been included. Results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or thereafter.

Walker & Dunlop, Inc. is a holding company and conducts the majority of its operations through Walker & Dunlop, LLC, the operating company. Walker & Dunlop is one of the leading commercial real estate services and finance companies in the United States. The Company originates, sells, and services a range of commercial real estate debt and equity financing products, provides multifamily property sales brokerage and valuation services, engages in commercial real estate investment management activities with a particular focus on the affordable housing sector through low-income housing tax credit (“LIHTC”) syndication, provides housing market research, and delivers real estate-related investment banking and advisory services.

Through its agency lending products, the Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac” and, together with Fannie Mae, the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). Through its debt brokerage products, the Company brokers, and in some cases services, loans for various life insurance companies, commercial banks, commercial mortgage-backed securities issuers, and other institutional investors.    

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation—The condensed consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly-owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting.

If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but holds a controlling financial interest and is the primary beneficiary or owns a majority of the voting interests, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Condensed Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Condensed Consolidated Statements of Income.

Subsequent Events—The Company has evaluated the effects of all events that have occurred subsequent to June 30, 2022. The Company has made certain disclosures in the notes to the condensed consolidated financial statements of events that have occurred subsequent to June 30, 2022. There have been no other material subsequent events that would require recognition in the condensed consolidated financial statements.

Use of Estimates—The preparation of condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, including the allowance for risk-sharing obligations, initial fair value of capitalized mortgage servicing

rights, asset management fee receivable related to LIHTC funds, derivative instruments, estimation of contingent consideration for business combinations, estimation of the fair value of the Apprise joint venture (as discussed in NOTE 7), and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates.

Co-broker Fees—Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income, were $4.4 million and $3.6 million for the three months ended June 30, 2022 and 2021, respectively and $10.3 million and $8.9 million for the six months ended June 30, 2022 and 2021, respectively.

Loans Held for Investment, net—Loans held for investment are multifamily interim loans originated by the Company for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing (“Interim Loan Program”). These loans have terms of up to three years and are all adjustable-rate, interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses.

As of June 30, 2022, Loans held for investment, net consisted of nine loans with an aggregate $252.1 million of unpaid principal balance less $0.9 million of net unamortized deferred fees and costs and $4.0 million of allowance for loan losses. As of December 31, 2021, Loans held for investment, net consisted of 12 loans with an aggregate $274.5 million of unpaid principal balance less $1.2 million of net unamortized deferred fees and costs and $4.2 million of allowance for loan losses.

The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the Current Expected Credit Losses (“CECL”) standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year.

The loss rate for the forecast period was 11 basis points and 15 basis points as of June 30, 2022 and December 31, 2021, respectively. The loss rate for the remaining period until maturity was six basis points and nine basis points as of June 30, 2022 and December 31, 2021, respectively.

One loan held for investment with an unpaid principal balance of $14.7 million was delinquent and on non-accrual status as of June 30, 2022 and December 31, 2021. The Company had $3.7 million in collateral-based reserves for this loan as of both June 30, 2022 and December 31, 2021 and has not recorded any interest related to this loan since it went on non-accrual status in 2019. All other loans were current as of June 30, 2022 and December 31, 2021. The amortized cost basis of loans that were current as of June 30, 2022 and December 31, 2021 was $236.3 million and $258.6 million, respectively. As of June 30, 2022, $48.6 million, $160.5 million, and $28.3 million of the loans that were current were originated in 2022, 2021, and 2019, respectively. Other than the defaulted loan noted above, the Company has not experienced any delinquencies related to loans held for investment.

Provision (Benefit) for Credit Losses—The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Condensed Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the three and six months ended June 30, 2022 and 2021:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Provision (Benefit) for Credit Losses (in thousands)	2022		2021		2022		2021
Provision (benefit) for loan losses	$	(71)	$	(75)	$	(177)	$	(662)
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Provision (benefit) for credit losses	$	(4,840)	$	(4,326)	$	(14,338)	$	(15,646)

Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also occasionally fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. The Company had a portfolio of participating interests in loans held for investment that was accounted for as a secured borrowing and paid off at the end of the second quarter of 2021. The Company recognized Net warehouse interest income on the unpaid principal balance of the loans and secured borrowing for the three and six months ended June 30, 2021. Included in Net warehouse interest income for the three and six months ended June 30, 2022 and 2021 are the following components:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Net Warehouse Interest Income (in thousands)	2022		2021		2022		2021
Warehouse interest income - loans held for sale	$	12,175	$	7,863	$	21,038	$	16,981
Warehouse interest expense - loans held for sale		(8,468)		(4,979)		(13,801)		(11,638)
Net warehouse interest income - loans held for sale	$	3,707	$	2,884	$	7,237	$	5,343
Warehouse interest income - loans held for investment	$	3,015	$	2,962	$	5,365	$	6,190
Warehouse interest expense - loans held for investment		(1,454)		(1,216)		(2,561)		(2,348)
Warehouse interest income - secured borrowings		—		883		—		1,748
Warehouse interest expense - secured borrowings		—		(883)		—		(1,748)
Net warehouse interest income - loans held for investment	$	1,561	$	1,746	$	2,804	$	3,842
Total net warehouse interest income	$	5,268	$	4,630	$	10,041	$	9,185

        Statement of Cash Flows—For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of June 30, 2022 and 2021 and December 31, 2021 and 2020.

	June 30,				December 31,
(in thousands)	2022		2021		2021		2020
Cash and cash equivalents	$	151,252	$	326,518	$	305,635	$	321,097
Restricted cash		34,361		15,842		42,812		19,432
Pledged cash and cash equivalents (NOTE 9)		10,149		47,396		44,733		17,473
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	195,762	$	389,756	$	393,180	$	358,002

        Income Taxes—The Company records the realizable excess tax benefits from stock-based compensation as a reduction to income tax expense. The realizable excess tax benefits were $0.3 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively, and $5.2 million for each of the six months ended June 30, 2022 and 2021.

Contracts with Customers—A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. The majority of the Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the majority all of the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and six months ended June 30, 2022 and 2021:  

	For the three months ended				For the six months ended
	June 30,				June 30,
Description (in thousands)	2022		2021		2022		2021		Statement of income line item
Certain loan origination fees	$	53,281	$	43,222	$	90,646	$	67,123	Loan origination and debt brokerage fees, net
Property sales broker fees		46,386		22,454		69,784		31,496	Property sales broker fees
Investment management fees		10,282		3,815		22,930		6,551	Investment management fees
Application fees, subscription revenues, other revenues from LIHTC operations, and other revenues		35,198		4,113		50,855		7,627	Other revenues
Total revenues derived from contracts with customers	$	145,147	$	73,604	$	234,215	$	112,797

Litigation—In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition.

Recently Adopted and Recently Announced Accounting Pronouncements—There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2021 Form 10-K. There are no recently announced but not yet effective accounting pronouncements that are expected to have a material impact to the Company as of June 30, 2022.

Reclassifications—The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year    presentation.

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MORTGAGE SERVICING RIGHTS

6 Months Ended

Jun. 30, 2022

MSRs

Mortgage Servicing Rights

Mortgage Servicing Rights

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of the mortgage servicing rights (“MSRs”) was $1.3 billion as of both June 30, 2022 and December 31, 2021. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. For example, see the following sensitivities related to the discount rate:

The impact of a 100-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $40.6 million to the MSRs outstanding as of June 30, 2022.

The impact of a 200-basis point increase in the discount rate at June 30, 2022 would be a decrease in the fair value of $78.6 million to the MSRs outstanding as of June 30, 2022.

These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets.

Activity related to MSRs for the three and six months ended June 30, 2022 and 2021 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of MSRs (in thousands)	2022		2021		2022		2021
Beginning balance	$	976,554	$	909,884	$	953,845	$	862,813
Additions, following the sale of loan		60,445		57,300		137,299		153,940
Amortization		(47,098)		(43,914)		(93,455)		(86,466)
Pre-payments and write-offs		(11,156)		(7,751)		(18,944)		(14,768)
Ending balance	$	978,745	$	915,519	$	978,745	$	915,519

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of June 30, 2022 and December 31, 2021:

Components of MSRs (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	1,617,975	$	1,548,870
Accumulated amortization		(639,230)		(595,025)
Net carrying value	$	978,745	$	953,845

The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of June 30, 2022 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	92,455
Year Ending December 31,
2023	$	177,502
2024		159,556
2025		136,593
2026		115,353
2027		97,384
Thereafter		199,902
Total	$	978,745

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GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS

6 Months Ended

Jun. 30, 2022

GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS

Guaranty Obligation and Allowance for Risk-Sharing Obligations

NOTE 4—ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION

When a loan is sold under the Fannie Mae DUS program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. The guaranty is in force while the loan is outstanding. The Company does not provide a guaranty for any other loan product it sells or brokers. Substantially all loans sold under the Fannie Mae DUS program contain partial or full-risk sharing guaranties that are based on the credit performance of the loan. The Company records an estimate of the loss reserve for CECL for all loans in its Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Condensed Consolidated Balance Sheets. Additionally, a guaranty obligation is presented as a component of Other liabilities on the Condensed Consolidated Balance Sheets.

Activity related to the allowance for risk-sharing obligations for the three and six months ended June 30, 2022 and 2021 follows:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Allowance for Risk-Sharing Obligations (in thousands)	2022		2021		2022		2021
Beginning balance	$	53,244	$	64,580	$	62,636	$	75,313
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Write-offs		—		—		—		—
Ending balance	$	48,475	$	60,329	$	48,475	$	60,329

During the first quarter of 2022, the Company updated its historical loss rate factor calculation to the current 10-year rolling period, with no change during the three months ended June 30, 2022. The historical loss rate used for the calculation of the CECL reserve was 1.2 basis points as of June 30, 2022 compared to 1.8 basis points as of December 31, 2021, contributing to the benefit for risk-sharing obligations for the six months ended June 30, 2022 presented above. During the second quarter of 2022, the Company updated its estimate of the forecast-period loss rate to 2.2 basis points from three basis points as of March 31, 2022, based on (i) the projected unemployment rate, (ii) overall health of the multifamily market, and (iii) other information expected during the forecast-period and reverted over a one-year period to the

aforementioned 1.2 basis points historical loss rate. The change in the forecast-period loss rate led to the benefit for risk-sharing obligations for the three months ended June 30, 2022, presented above, and contributed to the benefit for the six months ended June 30, 2022 presented above.

During the first half of 2021, reported and forecasted unemployment rates significantly improved compared to December 31, 2020. In response to improving unemployment statistics and the expected continued overall health of the multifamily market, the Company reduced the loss rate for the forecast period to four basis points as of March 31, 2021 and three basis points as of June 30, 2021 from six basis points as of December 31, 2020, resulting in the benefit for risk-sharing obligations for the three and six months ended June 30, 2021, as presented above.

The calculated CECL reserve for the Company’s $51.2 billion at-risk Fannie Mae servicing portfolio as of June 30, 2022 was $37.7 million compared to $52.3 million as of December 31, 2021. The weighted-average remaining life of the at-risk Fannie Mae servicing portfolio as of June 30, 2022 was 7.3 years compared to 7.5 years as of December 31, 2021.

Three loans had aggregate collateral-based reserves of $10.8 million and $10.3 million as of June 30, 2022 and December 31, 2021, respectively.

Activity related to the guaranty obligation for the three and six months ended June 30, 2022 and 2021 is presented in the following table:

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Guaranty Obligation (in thousands)	2022		2021		2022		2021
Beginning balance	$	46,490	$	51,836	$	47,378	$	52,306
Additions, following the sale of loan		1,759		853		3,310		2,574
Amortization and write-offs		(2,600)		(2,320)		(5,039)		(4,511)
Ending balance	$	45,649	$	50,369	$	45,649	$	50,369

As of June 30, 2022 and 2021, the maximum quantifiable contingent liability associated with the Company’s guaranties for the at-risk loans serviced under the Fannie Mae DUS agreement was $10.5 billion and $9.5 billion, respectively. This maximum quantifiable contingent liability relates to the at-risk loans serviced for Fannie Mae at the specific point in time indicated. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans were determined to be without value at the time of settlement.

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SERVICING

6 Months Ended

Jun. 30, 2022

Loans and Other Servicing Accounts

Servicing

Servicing

NOTE 5—SERVICING

The total unpaid principal balance of loans the Company was servicing for various institutional investors was $119.0 billion as of June 30, 2022 compared to $115.7 billion as of December 31, 2021.

As of June 30, 2022 and December 31, 2021, custodial escrow accounts relating to loans serviced by the Company totaled $2.3 billion and $3.7 billion, respectively. These amounts are not included in the Condensed Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to earn fees on these escrow balances, presented as a component of Escrow earnings and other interest income in the Condensed Consolidated Statements of Income. Certain cash deposits at other financial institutions exceed the Federal Deposit Insurance Corporation insured limits. The Company places these deposits with financial institutions that meet the requirements of the Agencies and where it believes the risk of loss to be minimal.

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WAREHOUSE NOTES PAYABLE

6 Months Ended

Jun. 30, 2022

WAREHOUSE NOTES PAYABLE

Warehouse Notes Payable

NOTE 6—WAREHOUSE NOTES PAYABLE

As of June 30, 2022, to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $3.9 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company’s approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of financings on acceptable terms.

Additionally, as of June 30, 2022, the Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate loans held for investment depends upon its ability to secure and maintain these types of financings on acceptable terms.  

The Company also has a warehouse line of credit in the amount of $30.0 million with a national bank to assist in funding the Company’s Committed investments in tax credit equity before transferring them to a tax credit fund (“Tax Credit Equity Warehouse Facility”).

The maximum amount and outstanding borrowings under Warehouse notes payable at June 30, 2022 follows.

	June 30, 2022
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility	Amount		Amount		Capacity		Balance		Interest rate(1)
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	105,286	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		272,369	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		287,275	Adjusted Term SOFR plus 1.35%
Agency Warehouse Facility #4		200,000		225,000		425,000		128,251	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		68,804	Adjusted Term SOFR plus 1.45%
Agency Warehouse Facility #6		150,000		50,000		200,000		—	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,075,000	$	1,840,000	$	3,915,000	$	861,985
Fannie Mae repurchase agreement, uncommitted line and open maturity		—		1,500,000		1,500,000		71,119
Total Agency Warehouse Facilities	$	2,075,000	$	3,340,000	$	5,415,000	$	933,104
Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	Adjusted Term SOFR plus 1.80%
Interim Warehouse Facility #2		100,000		—		100,000		—	Adjusted Term SOFR plus 1.35% to 1.85%
Interim Warehouse Facility #3		200,000		—		200,000		163,468	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities	$	454,810	$	—	$	454,810	$	183,278
Tax Credit Equity Warehouse Facility	$	30,000	$	—	$	30,000	$	9,777	Adjusted Daily SOFR plus 3.00%
Debt issuance costs		—		—		—		(482)
Total warehouse facilities	$	2,559,810	$	3,340,000	$	5,899,810	$	1,125,677

(1) Interest rate presented does not include the effect of any applicable interest rate floors.

During 2022, the following amendments to the Warehouse Facilities were executed in the normal course of business to support the growth of the Company’s business.  

Agency Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment to Agency Warehouse Facility #2 that extended the maturity date to April 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #3 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 basis points with an Adjusted Term SOFR floor of 15 basis points. No other material modifications have been made to the agreement during 2022.

During the second quarter of 2022, the Company executed an amendment related to Agency Warehouse Facility #4 that extended the maturity date to June 22, 2023, increased the total borrowing capacity to $425 million from $350 million, and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 130 basis points. No other material modifications have been made to the agreement during 2022.

Interim Warehouse Facilities

During the second quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #1 that extended the maturity date to May 15, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 180 basis points. No other material modifications have been made to the agreement during 2022.

During the first quarter of 2022, the Company executed an amendment related to Interim Warehouse Facility #2 that extended the maturity date to December 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 to 185 basis points. No other material modifications have been made to the agreement during 2022.

Tax Credit Equity Warehouse Facility

During 2022, the Company executed amendments related to the Tax Credit Equity Warehouse Facility that extended the maturity date to August 30, 2022. Additionally, the amendments transitioned the interest rate from Daily LIBOR plus 300 basis points to Adjusted Daily SOFR plus 300 basis points, with a SOFR floor of 150 basis points. No other material modifications have been made to the agreement during 2022.

The warehouse notes payable are subject to various financial covenants, all of which the Company was in compliance with as of June 30, 2022. Interest on the Company’s warehouse notes payable is based on 30-day LIBOR, Adjusted Term SOFR, or Adjusted Daily SOFR. As a result of the expected transition from LIBOR, the Company has updated its debt agreements to include fallback language to govern the transition from 30-day LIBOR to an alternative reference rate.  

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2022

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Other Intangible Assets

NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Acquisition Activities

A summary of the Company’s goodwill for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Goodwill (in thousands)	2022		2021
Beginning balance	$	698,635	$	248,958
Additions from acquisitions		213,874		17,507
Measurement-period adjustments		25,372		—
Impairment		—		—
Ending balance	$	937,881	$	266,465

The addition to goodwill from acquisitions during 2022 shown in the table above during the six months ended June 30, 2022 relates to the Company’s February 28, 2022 acquisition of 100% of the equity interests of GeoPhy B.V. (“GeoPhy”), a Netherlands-based commercial real-estate technology company. As part of the acquisition, the Company also obtained GeoPhy’s 50% interest in the Company’s appraisal joint

venture, Apprise. The Company now owns 100% of Apprise and consolidates its balances and its operating results post acquisition. Prior to the acquisition, the Company accounted for its investment in Apprise under the equity method. The fair value of the consideration was $210.1 million and consisted of $87.6 million of cash, $5.5 million of forgiveness of a receivable the Company had with the joint venture (non-cash activity not reflected in the Condensed Consolidated Statements of Cash Flows), and $117.0 million of contingent consideration.

GeoPhy’s data analytics and technology development capabilities are expected to accelerate the growth of the Company’s lending, brokerage, and appraisal operations. The GeoPhy acquisition is also expected to allow the Company to meet its goal of $5 billion of annual small-balance lending volume and appraisal revenue of $75 million by 2025 as part of the Company’s overall growth targets. A significant portion of the value associated with the GeoPhy acquisition was related to the assembled workforces with their combined expertise in information technology, data science, and commercial real estate. The Company believes that the combination of GeoPhy’s personnel, appraisal technology platform, and the future development of technology to accelerate growth in the origination of small-balance commercial loans, along with Walker & Dunlop’s financial resources will (i) drive a significant increase in the identification and retention of borrowers in the small-balance segment of the multifamily market and (ii) continue to drive significant growth in appraisal revenues over the next five years. GeoPhy’s financial results since the acquisition and pro-forma information as if the acquisition occurred January 1, 2021 were immaterial.

The contingent consideration noted above is contingent on achieving certain Apprise revenue and productivity milestones and small-balance loan volume and revenue milestones over a four-year period. The maximum earnout included as part of the GeoPhy acquisition is $205.0 million. The Company estimated that $132.7 million, or 65% of the maximum earnout, is achievable based on management forecasts. The discounted balance of $117.0 million is 57% of the maximum earnout amount. The Company estimated the fair value of this contingent consideration using a Monte Carlo simulation. The weighted average cost of capital (“WACC”) used for the valuation of the contingent consideration was 17.0% for the Apprise portion of the earnout and 14.5% for the small-balance portion of the earnout. The WACC reflects the additional risk inherent in the Apprise performance estimates as it is still in the startup stage of its development. The estimated achievable earnout amount was discounted using a forward curve for a Company-specific subordinated debt rating.

The calculation of goodwill of $211.9 million included the fair value of the consideration transferred of $210.1 million and the acquisition-date fair value of the Company’s previously-held equity-method investment in Apprise of $58.5 million. The book value of the Company’s equity-method investment in Apprise prior to the acquisition date was $18.9 million, resulting in a $39.6 million gain from remeasuring to fair value. The gain is included as a component of Other revenues in the Condensed Consolidated Statements of Income. The Company used a discounted cash flow model to estimate the acquisition-date fair value of Apprise, with the discount rate and management’s forecast of future revenues and cash flows as the most-significant inputs for the estimate. The discount rate used was 17.0%, and a control premium was not included in the estimate.

The Company expects a large portion of the goodwill to be tax deductible, with the tax-deductible amount of goodwill related to the contingent consideration to be determined once the cash payments to settle the contingent consideration are made. The goodwill resulting from the GeoPhy acquisition was allocated to the Company’s Capital Markets reportable segment. The other assets primarily consisted of technology intangible assets of $31.0 million and deferred tax assets of $9.4 million. The technology intangible assets will be amortized over a 10-year period. Immaterial liabilities were assumed.

As of June 30, 2022, the amounts recorded for the GeoPhy acquisition were provisional as the Company had not completed the purchase accounting for the GeoPhy acquisition as it awaits additional tax information.

The measurement-period adjustments above primarily relate to the Company’s acquisition of Alliant Capital Ltd. (“Alliant”), an acquisition completed in December of 2021, as more fully described in the Company’s 2021 Form 10-K. The measurement-period adjustments consist of (i) $29.7 million additional purchase price consideration related to the settlement of working capital adjustments and (ii) immaterial other adjustments. The additional consideration was paid during the third quarter of 2022. The Company has substantially completed the purchase accounting for the Alliant acquisition as of June 30, 2022.

As discussed in NOTE 11 below and beginning in the first quarter of 2022, the Company now has three reportable segments. The following table shows goodwill by reportable segments as of June 30, 2022. As the Company did not have segment reporting as of December 31, 2021, all of the goodwill balance was allocated to the Company’s one reportable segment as of December 31, 2021. As noted above, the additions in the first quarter of 2022 were allocated to Capital Markets, and the measurement-period adjustments relate to both Capital Markets and Servicing & Asset Management.

Goodwill by Reportable Segment (in thousands)	As of June 30, 2022
Capital Markets	$	448,048
Servicing & Asset Management		489,833
Corporate		—
Ending balance	$	937,881

Other Intangible Assets

Activity related to other intangible assets for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Other Intangible Assets (in thousands)	2022		2021
Beginning balance	$	183,904	$	1,880
Additions from acquisitions		31,000		504
Amortization		(7,880)		(831)
Ending balance	$	207,024	$	1,553

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s other intangible assets as of June 30, 2022 and December 31, 2021:

Components of Other Intangible Assets (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	220,682	$	189,682
Accumulated amortization		(13,658)		(5,778)
Net carrying value	$	207,024	$	183,904

The expected amortization of other intangible assets shown in the Condensed Consolidated Balance Sheet as of June 30, 2022 is shown in the table below. Actual amortization may vary from these estimates.

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	8,870
Year Ending December 31,
2023	$	17,303
2024		16,246
2025		16,206
2026		16,206
2027		16,206
Thereafter		115,987
Total	$	207,024

Contingent Consideration Liabilities

A summary of the Company’s contingent consideration liabilities, which are included in Other liabilities in the Condensed Consolidated Balance Sheets, as of and for the six months ended June 30, 2022 and 2021 follows:

	For the six months ended
	June 30,
Roll Forward of Contingent Consideration Liabilities (in thousands)	2022		2021
Beginning balance	$	125,808	$	28,829
Additions		117,000		7,504
Accretion and revaluation		1,823		906
Payments		(26,439)		—
Ending balance	$	218,192	$	37,239

The contingent consideration liabilities presented in the table above relate to (i) acquisitions of debt brokerage companies and an investment sales brokerage company completed over the past several years, (ii) the purchase of noncontrolling interests in 2020 that was fully earned as of December 31, 2021 and paid in 2022, (iii) the Alliant acquisition, and (iv) the GeoPhy acquisition. The contingent consideration for each of the acquisitions may be earned over various lengths of time after each acquisition, with a maximum earn-out period of five years, provided certain revenue targets and other metrics have been met. The last of the earn-out periods related to the contingent consideration ends in the first quarter of 2026. In each case, the Company estimated the initial fair value of the contingent consideration using a Monte Carlo simulation.

The recognition of the contingent consideration liability for the GeoPhy acquisition is non-cash, and thus not reflected in the amount of cash consideration paid on the Condensed Consolidated Statements of Cash Flows. In addition, $8.8 million of the payments settling contingent consideration liabilities included in the table above for the six months ended June 30, 2022 were from the issuance of the Company’s common stock, a non-cash transaction.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2022

FAIR VALUE MEASUREMENTS

Fair Value Measurements

NOTE 8—FAIR VALUE MEASUREMENTS

The Company uses valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

● Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

● Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, discount rates, volatilities, prepayment speeds, earnings rates, credit risk, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

● Level 3—Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation.

The Company's MSRs are measured at fair value at inception, and thereafter on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. Accordingly, the estimated

fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated revenue from escrow accounts, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that market participants consider in valuing MSR assets. MSRs are carried at the lower of amortized cost or fair value.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

● Derivative Instruments—The derivative positions consist of interest rate lock commitments with borrowers and forward sale agreements to the Agencies. The fair value of these instruments is estimated using a discounted cash flow model developed based on changes in the applicable U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company, and are classified within Level 3 of the valuation hierarchy.

● Loans Held for Sale—All loans held for sale presented in the Condensed Consolidated Balance Sheets are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted observable inputs from market participants such as changes in the U.S. Treasury rate. Therefore, the Company classifies these loans held for sale as Level 2.

● Pledged Securities—Investments in money market funds are valued using quoted market prices from recent trades. Therefore, the Company classifies this portion of pledged securities as Level 1. The Company determines the fair value of its AFS investments in Agency debt securities using discounted cash flows that incorporate observable inputs from market participants and then compares the fair value to broker estimates of fair value. Consequently, the Company classifies this portion of pledged securities as Level 2.

● Contingent Consideration Liabilities—Contingent consideration liabilities from acquisitions are initially recognized at fair value at acquisition and subsequently remeasured based on the change in probability of achievement of the performance objectives and fair value accretion. The remeasurement and fair value accretion are recognized as Other operating expenses in the Condensed Consolidated Statements of Income. The Company determines the fair value of each contingent consideration liability based on a combination of Monte Carlo simulations and probability of achievement estimates, which incorporates management estimates. As a result, the Company classifies these liabilities as Level 3.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value:

							Balance as of
(in thousands)	Level 1		Level 2		Level 3		Period End
June 30, 2022
Assets
Loans held for sale	$	—	$	931,516	$	—	$	931,516
Pledged securities		10,149		139,411		—		149,560
Derivative assets		—		—		59,810		59,810
Total	$	10,149	$	1,070,927	$	59,810	$	1,140,886
Liabilities
Derivative liabilities	$	—	$	—	$	17,176	$	17,176
Contingent consideration liabilities		—		—		218,192		218,192
Total	$	—	$	—	$	235,368	$	235,368
December 31, 2021
Assets
Loans held for sale	$	—	$	1,811,586	$	—	$	1,811,586
Pledged securities		44,733		104,263		—		148,996
Derivative assets		—		—		37,364		37,364
Total	$	44,733	$	1,915,849	$	37,364	$	1,997,946
Liabilities
Derivative liabilities	$	—	$	—	$	6,403	$	6,403
Contingent consideration liabilities		—		—		125,808		125,808
Total	$	—	$	—	$	132,211	$	132,211

There were no transfers between any of the levels within the fair value hierarchy during the six months ended June 30, 2022.

Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days). A roll forward of derivative instruments is presented below for the three and six months ended June 30, 2022 and 2021:

	For the three months ended				For the six months ended
	June 30,				June 30,
Derivative Assets and Liabilities, net (in thousands)	2022		2021		2022		2021
Beginning balance	$	99,623	$	48,880	$	30,961	$	44,720
Settlements		(211,543)		(211,771)		(277,921)		(341,515)
Realized gains recorded in earnings(1)		111,920		162,891		246,960		296,795
Unrealized gains (losses) recorded in earnings(1)		42,634		6,340		42,634		6,340
Ending balance	$	42,634	$	6,340	$	42,634	$	6,340

(1) Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Condensed Consolidated Statements of Income.

The following table presents information about significant unobservable inputs used in the recurring measurement of the fair value of the Company’s Level 3 assets and liabilities as of June 30, 2022:

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value		Valuation Technique	Unobservable Input (1)	Input Range (1)	Weighted Average (3)
Derivative assets	$	59,810	Discounted cash flow	Counterparty credit risk	—	—
Derivative liabilities	$	17,176	Discounted cash flow	Counterparty credit risk	—	—
Contingent consideration liabilities	$	218,192	Various(2)	Probability of earn-out achievement	65% - 100%	76%

(1) Significant increases in this input may lead to significantly lower fair value measurements.

(2) Primary valuation technique used was a Monte Carlo simulation analysis.

(3) Contingent consideration weighted based on maximum gross earn-out amount.

The carrying amounts and the fair values of the Company's financial instruments as of June 30, 2022 and December 31, 2021 are presented below:

	June 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
(in thousands)	Amount		Value		Amount		Value
Financial Assets:
Cash and cash equivalents	$	151,252	$	151,252	$	305,635	$	305,635
Restricted cash		34,361		34,361		42,812		42,812
Pledged securities		149,560		149,560		148,996		148,996
Loans held for sale		931,516		931,516		1,811,586		1,811,586
Loans held for investment, net		247,243		248,383		269,125		270,826
Derivative assets		59,810		59,810		37,364		37,364
Total financial assets	$	1,573,742	$	1,574,882	$	2,615,518	$	2,617,219
Financial Liabilities:
Derivative liabilities	$	17,176	$	17,176	$	6,403	$	6,403
Contingent consideration liabilities		218,192		218,192		125,808		125,808
Warehouse notes payable		1,125,677		1,126,159		1,941,572		1,942,448
Notes payable		719,210		723,931		740,174		745,175
Total financial liabilities	$	2,080,255	$	2,085,458	$	2,813,957	$	2,819,834

The following methods and assumptions were used for recurring fair value measurements as of June 30, 2022 and December 31, 2021.

Cash and Cash Equivalents and Restricted Cash—The carrying amounts approximate fair value because of the short maturity of these instruments (Level 1).

Pledged Securities—Consist of cash, highly liquid investments in money market accounts invested in government securities, and investments in Agency debt securities. The investments of the money market funds typically have maturities of 90 days or less and are valued using quoted market prices from recent trades. The fair value of the Agency debt securities incorporates the contractual cash flows of the security discounted at market-rate, risk-adjusted yields.

Loans Held for Sale—Consist of originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded and are valued using discounted cash flow models that incorporate observable prices from market participants.

Contingent Consideration Liability—Consists of the estimated fair values of expected future earn-out payments related to acquisitions completed over the past several years, including 2022. The earn-out liabilities are valued using a Monte Carlo simulation analysis. The fair value of the contingent consideration liabilities incorporates unobservable inputs, such as the probability of earn-out achievement, volatility rates, and discount rate, to determine the expected earn-out cash flows. The probability of the earn-out achievement is based on management’s estimate of the expected future performance and other financial metrics of each of the acquired entities, which are subject to significant uncertainty.

Derivative Instruments—Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company.

Fair Value of Derivative Instruments and Loans Held for Sale—In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor.

To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into a sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income. The fair value of the Company's rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:

● the estimated gain of the expected loan sale to the investor (Level 2);

● the expected net cash flows associated with servicing the loan, net of any guaranty obligations retained (Level 2);

● the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

● the nonperformance risk of both the counterparty and the Company (Level 3; derivative instruments only).

The estimated gain considers the origination fees the Company expects to collect upon loan closing (derivative instruments only) and premiums the Company expects to receive upon sale of the loan (Level 2). The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques applicable to the fair value of future servicing, net at loan sale (Level 2).

To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount (Level 2).

The fair value of the Company's forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in interest rate lock commitments and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties and the short duration of interest rate lock commitments and forward sale contracts, the risk of nonperformance by the Company’s counterparties has historically been minimal (Level 3).

The following table presents the components of fair value and other relevant information associated with the Company’s derivative instruments and loans held for sale as of June 30, 2022 and December 31, 2021:

			Fair Value Adjustment Components						Balance Sheet Location
													Fair Value
	Notional or		Estimated				Total						Adjustment
	Principal		Gain		Interest Rate		Fair Value		Derivative		Derivative		to Loans
(in thousands)	Amount		on Sale		Movement		Adjustment		Assets		Liabilities		Held for Sale
June 30, 2022
Rate lock commitments	$	820,439	$	20,105	$	12,556	$	32,661	$	33,386	$	(725)	$	—
Forward sale contracts		1,753,635		—		9,973		9,973		26,424		(16,451)		—
Loans held for sale		933,196		20,849		(22,529)		(1,680)		—		—		(1,680)
Total			$	40,954	$	—	$	40,954	$	59,810	$	(17,176)	$	(1,680)
December 31, 2021
Rate lock commitments	$	1,115,829	$	29,837	$	(4,604)	$	25,233	$	26,526	$	(1,293)	$	—
Forward sale contracts		2,881,224		—		5,728		5,728		10,838		(5,110)		—
Loans held for sale		1,765,395		47,315		(1,124)		46,191		—		—		46,191
Total			$	77,152	$	—	$	77,152	$	37,364	$	(6,403)	$	46,191

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FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

6 Months Ended

Jun. 30, 2022

FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Fannie Mae Commitments and Pledged Securities

NOTE 9—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Fannie Mae DUS Related Commitments—Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing, and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 8, the Company accounts for these commitments as derivatives recorded at fair value.

The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Condensed Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5%, and Agency mortgage-backed securities (“Agency MBS”) are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held the majority of its pledged securities in Agency MBS as of June 30, 2022. The majority of the loans for which the Company has risk sharing are Tier 2 loans.

The Company is in compliance with the June 30, 2022 collateral requirements as outlined above. As of June 30, 2022, reserve requirements for the DUS loan portfolio will require the Company to fund $70.4 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has in the past reassessed the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future increases to collateral requirements may adversely impact the Company’s available cash.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if, at any time, it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of June 30, 2022. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. At June 30, 2022, the net worth requirement was $266.2 million, and the Company's net worth, as defined in the requirements, was $621.6 million, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC. As of June 30, 2022, the Company was required to maintain at least $52.8 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae, and the Company had operational liquidity, as defined in the requirements, of $116.0 million as of June 30, 2022, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC.

Pledged Securities, at Fair Value—Pledged securities, at fair value consisted of the following balances as of June 30, 2022 and 2021 and December 31, 2021 and 2020:

	June 30,				December 31,
Pledged Securities (in thousands)	2022		2021		2021		2020
Restricted cash	$	5,979	$	7,442	$	3,779	$	4,954
Money market funds		4,170		39,954		40,954		12,519
Total pledged cash and cash equivalents	$	10,149	$	47,396	$	44,733	$	17,473
Agency MBS		139,411		99,152		104,263		119,763
Total pledged securities, at fair value	$	149,560	$	146,548	$	148,996	$	137,236

The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Condensed Consolidated Statements of Cash Flows as more fully discussed in NOTE 2.

The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency MBS and are all accounted for as AFS securities. When the fair value of Agency MBS is lower than the carrying value, the Company assesses whether an allowance for credit losses is necessary. The Company does not record an allowance for credit losses for its AFS securities, including those whose fair value is less than amortized cost, when the AFS securities are issued by the GSEs. The contractual cash flows of these AFS securities are guaranteed by the GSEs, which are government-sponsored enterprises under the conservatorship of the Federal Housing Finance Agency. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of these securities. The Company does not intend to sell any of the Agency MBS whose fair value is less than the carrying value, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The following table provides additional information related to the Agency MBS as of June 30, 2022 and December 31, 2021:

Fair Value and Amortized Cost of Agency MBS (in thousands)	June 30, 2022		December 31, 2021
Fair value	$	139,411	$	104,263
Amortized cost		139,737		100,847
Total gains for securities with net gains in AOCI		1,242		3,636
Total losses for securities with net losses in AOCI		(1,568)		(220)
Fair value of securities with unrealized losses		104,433		4,757

An immaterial amount of the pledged securities has been in a continuous unrealized loss position for more than 12 months.

The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date.

	June 30, 2022
Detail of Agency MBS Maturities (in thousands)	Fair Value		Amortized Cost
Within one year	$	—	$	—
After one year through five years		13,901		13,903
After five years through ten years		100,704		100,835
After ten years		24,806		24,999
Total	$	139,411	$	139,737

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EARNINGS PER SHARE AND STOCKHOLDERS EQUITY

6 Months Ended

Jun. 30, 2022

EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY

Earnings Per Share and Stockholders' Equity

NOTE 10—EARNINGS PER SHARE AND STOCKHOLDERS’ EQUITY

Earnings per share (“EPS”) is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2020 Equity Incentive Plan that entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities.

The following table presents the calculation of basic and diluted EPS for the three and six months ended June 30, 2022 and 2021 under the two-class method. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method.

	For the three months ended June 30,				For the six months ended June 30,
EPS Calculations (in thousands, except per share amounts)	2022		2021		2022		2021
Calculation of basic EPS
Walker & Dunlop net income	$	54,286	$	56,058	$	125,495	$	114,110
Less: dividends and undistributed earnings allocated to participating securities		1,554		1,831		3,708		3,798
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Basic EPS	$	1.63	$	1.75	$	3.77	$	3.57
Calculation of diluted EPS
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Add: reallocation of dividends and undistributed earnings based on assumed conversion		9		14		27		34
Net income allocated to common stockholders	$	52,741	$	54,241	$	121,814	$	110,346
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Add: weighted-average diluted non-participating securities		306		351		353		400
Weighted-average diluted shares outstanding		32,694		31,370		32,657		31,322
Diluted EPS	$	1.61	$	1.73	$	3.73	$	3.52

The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury-stock method includes the unrecognized compensation costs associated with the awards. For the three and six months ended June 30, 2022, 136 thousand average restricted shares and 87 thousand average restricted shares, respectively, were excluded. An immaterial number of average restricted shares were excluded from the computation of diluted EPS under the treasury-stock method for the three and six months ended June 30, 2021. These average restricted shares were excluded from the computation of diluted EPS under the treasury method  because the effect would have been anti-dilutive, as the grant date market price of the restricted shares was greater than the average market price of the Company’s shares of common stock during the periods presented.

The following non-cash transactions did not impact the amount of cash paid on the Condensed Consolidated Statements of Cash Flows. During 2022, the operating agreement of three of the Company’s tax-credit-related joint ventures changed. The Company reconsidered its consolidation conclusion based on these changes and concluded that the joint ventures should be consolidated, resulting in a $3.7 million increase in APIC and $6.8 million of noncontrolling interests consolidated as shown on the Consolidated Statements of Changes in Equity for the six months ended June 30, 2022. The consolidation also resulted in a $35.0 million increase in Receivables, net, a $21.3 million reduction in Other assets, and a $3.6 million increase in Other liabilities.

In February 2022, the Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 13, 2022. During the first quarter of 2022, the Company did not repurchase any shares of its common stock under the share repurchase program. During the second quarter of 2022, the Company repurchased 109 thousand shares of its common stock under the 2022 share repurchase program at a weighted-average price of $101.77 per share and immediately retired the shares, reducing stockholders’ equity by $11.1 million. As of June 30, 2022, the Company had $63.9 million of authorized share repurchase capacity remaining under the 2022 share repurchase program.

During each of the first and second quarters of 2022, the Company paid a dividend of $0.60 per share. On August 3, 2022, the Company’s Board of Directors declared a dividend of $0.60 per share for the third quarter of 2022. The dividend will be paid on September 2, 2022 to all holders of record of the Company’s restricted and unrestricted common stock as of August 18, 2022.

The Company’s Note Payable (“Term Loan”) contains direct restrictions to the amount of dividends the Company may pay, and the warehouse debt facilities and agreements with the Agencies contain minimum equity, liquidity, and other capital requirements that indirectly restrict the amount of dividends the Company may pay. The Company does not believe that these restrictions currently limit the amount of dividends the Company can pay for the foreseeable future.

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SEGMENTS

6 Months Ended

Jun. 30, 2022

SEGMENTS

Segments

NOTE 11—SEGMENTS

In the first quarter of 2022, as a result of the Company’s growth and recent acquisitions, the Company’s executive leadership team, which functions as the Company’s chief operating decision making body, began making decisions and assessing performance based on the following three operating segments. The operating segments are determined based on the product or service provided and reflect the manner in which management is currently evaluating the Company’s financial information.  

(i) Capital Markets (“CM”)—CM provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, and appraisal and valuation services. The Company’s long-established relationships with the Agencies and institutional investors enable CM to offer a broad range of loan products and services to the Company’s customers, including first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, and small-balance loans. CM provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various investors.

As part of Agency lending, CM temporarily funds the loans it originates (loans held for sale) before selling them to the Agencies and earns net interest income on the spread between the interest income on the loans and the warehouse interest expense. For Agency loans, CM recognizes the fair value of expected net cash flows from servicing, which represents the right to receive future servicing fees. CM also earns fees for origination of loans for both Agency lending and debt brokerage and fees for property sales and appraisals. Direct internal, including compensation, and external costs that are specific to CM are included within the results of this operating segment.

(ii) Servicing & Asset Management (“SAM”)—SAM’s activities include: (i) servicing and asset-managing the portfolio of loans the Company (a) originates and sells to the Agencies, (b) brokers to certain life insurance companies, and (c) originates through its principal lending and investing activities, (ii) managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate, and (iii) real estate-related investment banking and advisory services, including housing market research.

SAM earns revenue through (i) fees for servicing the loans in the Company’s servicing portfolio, (ii) asset management fees for managing third-party capital invested in funds, primarily LIHTC tax credit funds, (iii) subscription revenue for its housing market research, and (iv) net interest income on the spread between the interest income on the loans and the warehouse interest expense for loans held for investment. Direct internal, including compensation, and external costs that are specific to SAM are included within the results of this operating segment.

(iii) Corporate—The Corporate segment consists primarily of the Company’s treasury operations and other corporate-level activities. The Company’s treasury activities include monitoring and managing liquidity and funding requirements, including corporate debt. Other corporate-level activities include strategic equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups (“support functions”). The Company does not allocate costs from these support functions to the CM or SAM segments in presenting segment operating results, other than income tax expense, which is allocated proportionally based on income from operations at each segment.

The following tables provide a summary and reconciliation of each segment’s results for the three months ended June 30, 2022 and 2021.

	For the three months ended June 30, 2022
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	102,085	$	520	$	—	$	102,605
Fair value of expected net cash flows from servicing, net			51,949		—		—		51,949
Servicing fees			—		74,260		—		74,260
Property sales broker fees			46,386		—		—		46,386
Investment management fees			—		10,282		—		10,282
Net warehouse interest income			3,707		1,561		—		5,268
Escrow earnings and other interest income			—		6,648		103		6,751
Other revenues			3,895		39,280		172		43,347
Total revenues		$	208,022	$	132,551	$	275	$	340,848
Expenses
Personnel		$	138,913	$	21,881	$	7,574	$	168,368
Amortization and depreciation			810		58,760		1,533		61,103
Provision (benefit) for credit losses			—		(4,840)		—		(4,840)
Interest expense on corporate debt			—		—		6,412		6,412
Other operating expenses			4,583		6,559		25,053		36,195
Total expenses		$	144,306	$	82,360	$	40,572	$	267,238
Income from operations		$	63,716	$	50,191	$	(40,297)	$	73,610
Income tax expense			16,476		12,850		(9,823)		19,503
Net income before noncontrolling interests		$	47,240	$	37,341	$	(30,474)	$	54,107
Less: net income (loss) from noncontrolling interests			—		(179)		—		(179)
Walker & Dunlop net income		$	47,240	$	37,520	$	(30,474)	$	54,286

	For the three months ended June 30, 2021
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	105,583	$	1,889	$	—	$	107,472
Fair value of expected net cash flows from servicing, net			61,849		—		—		61,849
Servicing fees			—		69,052		—		69,052
Property sales broker fees			22,454		—		—		22,454
Investment management fees			—		3,815		—		3,815
Net warehouse interest income			2,884		1,746		—		4,630
Escrow earnings and other interest income			—		1,768		55		1,823
Other revenues			3,135		6,885		296		10,316
Total revenues		$	195,905	$	85,155	$	351	$	281,411
Expenses
Personnel		$	119,994	$	9,447	$	11,980	$	141,421
Amortization and depreciation			18		47,395		1,097		48,510
Provision (benefit) for credit losses			—		(4,326)		—		(4,326)
Interest expense on corporate debt			—		—		1,760		1,760
Other operating expenses			3,598		2,604		13,546		19,748
Total expenses		$	123,610	$	55,120	$	28,383	$	207,113
Income from operations		$	72,295	$	30,035	$	(28,032)	$	74,298
Income tax expense			17,739		7,475		(6,974)		18,240
Net income before noncontrolling interests		$	54,556	$	22,560	$	(21,058)	$	56,058
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	54,556	$	22,560	$	(21,058)	$	56,058

The following tables provide a summary and reconciliation of each segment’s results for the six months ended June 30, 2022 and 2021 and total assets as of June 30, 2022 and 2021.

	As of and for the six months ended June 30, 2022
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	183,908	$	1,007	$	—	$	184,915
Fair value of expected net cash flows from servicing, net			104,679		—		—		104,679
Servicing fees			—		146,941		—		146,941
Property sales broker fees			69,784		—		—		69,784
Investment management fees			—		22,930		—		22,930
Net warehouse interest income			7,237		2,804		—		10,041
Escrow earnings and other interest income			—		8,406		148		8,554
Other revenues			6,658		61,529		44,261		112,448
Total revenues		$	372,266	$	243,617	$	44,409	$	660,292
Expenses
Personnel		$	237,639	$	40,519	$	34,391	$	312,549
Amortization and depreciation			810		113,691		2,754		117,255
Provision (benefit) for credit losses			—		(14,338)		—		(14,338)
Interest expense on corporate debt			—		—		12,817		12,817
Other operating expenses			10,694		12,678		45,037		68,409
Total expenses		$	249,143	$	152,550	$	94,999	$	496,692
Income from operations		$	123,123	$	91,067	$	(50,590)	$	163,600
Income tax expense			29,323		21,689		(12,049)		38,963
Net income before noncontrolling interests		$	93,800	$	69,378	$	(38,541)	$	124,637
Less: net income (loss) from noncontrolling interests			—		(858)		—		(858)
Walker & Dunlop net income		$	93,800	$	70,236	$	(38,541)	$	125,495
Total assets		$	1,611,951	$	2,607,990	$	314,831	$	4,534,772

	As of and for the six months ended June 30, 2021
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	180,878	$	2,473	$	—	$	183,351
Fair value of expected net cash flows from servicing, net			119,784		—		—		119,784
Servicing fees			—		135,030		—		135,030
Property sales broker fees			31,496		—		—		31,496
Investment management fees			—		6,551		—		6,551
Net warehouse interest income			5,343		3,842		—		9,185
Escrow earnings and other interest income			—		3,767		173		3,940
Other revenues			5,695		11,657		(990)		16,362
Total revenues		$	343,196	$	163,320	$	(817)	$	505,699
Expenses
Personnel		$	192,629	$	16,558	$	28,449	$	237,636
Amortization and depreciation			539		92,773		2,069		95,381
Provision (benefit) for credit losses			—		(15,646)		—		(15,646)
Interest expense on corporate debt			—		—		3,525		3,525
Other operating expenses			7,000		4,857		25,478		37,335
Total expenses		$	200,168	$	98,542	$	59,521	$	358,231
Income from operations		$	143,028	$	64,778	$	(60,338)	$	147,468
Income tax expense			32,354		14,653		(13,649)		33,358
Net income before noncontrolling interests		$	110,674	$	50,125	$	(46,689)	$	114,110
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	110,674	$	50,125	$	(46,689)	$	114,110
Total assets		$	2,070,549	$	1,404,895	$	467,677	$	3,943,121

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VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2022

Variable Interest Entities

Variable Interest Entities

NOTE 12—VARIABLE INTEREST ENTITIES

The Company, through its subsidiary Alliant, provides alternative investment management services through the syndication of tax credit funds and the joint development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are VIEs.

A detailed discussion of the Company’s accounting policies regarding the consolidation of VIEs and significant transactions involving VIEs is included in NOTE 2 and NOTE 17 of the Company’s 2021 Form 10-K.

During 2022, the operating agreement of three of the Company’s joint ventures changed, resulting in the Company gaining the power to direct the activities that most significantly impact the economic performance of the joint venture; previously, the Company only held rights to receive the significant economic benefits of the joint venture. The Company reassessed its consolidation conclusion and determined that it was the primary beneficiary and as a result consolidated the joint venture as of as March 31, 2022. As of June 30, 2022 and December 31, 2021, the assets and liabilities of the consolidated tax credit funds were immaterial.

The table below presents the assets and liabilities of the Company’s consolidated joint development VIEs included in the Condensed Consolidated Balance Sheets:

Consolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	1,101	$	—
Restricted cash		1,049		—
Receivables, net		34,051		—
Other Assets		49,224		54,880
Total assets of consolidated VIEs	$	85,425	$	54,880
Liabilities:
Other liabilities	$	33,662	$	36,480
Total liabilities of consolidated VIEs	$	33,662	$	36,480

The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Condensed Consolidated Balance Sheets:

Nonconsolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets
Committed investments in tax credit equity	$	187,393	$	177,322
Other assets: Equity-method investments		55,970		74,997
Total interests in nonconsolidated VIEs	$	243,363	$	252,319
Liabilities
Commitments to fund investments in tax credit equity		173,740		162,747
Total commitments to fund nonconsolidated VIEs	$	173,740	$	162,747
Maximum exposure to losses(1)(2)	$	243,363	$	252,319

(1) Maximum exposure determined as Total interests in nonconsolidated VIEs. The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above.

(2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Principles of Consolidation—The condensed consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly-owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting.

If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but holds a controlling financial interest and is the primary beneficiary or owns a majority of the voting interests, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Condensed Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Condensed Consolidated Statements of Income.

Subsequent Events

Subsequent Events—The Company has evaluated the effects of all events that have occurred subsequent to June 30, 2022. The Company has made certain disclosures in the notes to the condensed consolidated financial statements of events that have occurred subsequent to June 30, 2022. There have been no other material subsequent events that would require recognition in the condensed consolidated financial statements.

Use of Estimates

Use of Estimates—The preparation of condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, including the allowance for risk-sharing obligations, initial fair value of capitalized mortgage servicing

rights, asset management fee receivable related to LIHTC funds, derivative instruments, estimation of contingent consideration for business combinations, estimation of the fair value of the Apprise joint venture (as discussed in NOTE 7), and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates.

Co-broker Fees

Co-broker Fees—Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income, were $4.4 million and $3.6 million for the three months ended June 30, 2022 and 2021, respectively and $10.3 million and $8.9 million for the six months ended June 30, 2022 and 2021, respectively.

Loans Held for Investment, net

Loans Held for Investment, net—Loans held for investment are multifamily interim loans originated by the Company for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing (“Interim Loan Program”). These loans have terms of up to three years and are all adjustable-rate, interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses.

As of June 30, 2022, Loans held for investment, net consisted of nine loans with an aggregate $252.1 million of unpaid principal balance less $0.9 million of net unamortized deferred fees and costs and $4.0 million of allowance for loan losses. As of December 31, 2021, Loans held for investment, net consisted of 12 loans with an aggregate $274.5 million of unpaid principal balance less $1.2 million of net unamortized deferred fees and costs and $4.2 million of allowance for loan losses.

The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the Current Expected Credit Losses (“CECL”) standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year.

The loss rate for the forecast period was 11 basis points and 15 basis points as of June 30, 2022 and December 31, 2021, respectively. The loss rate for the remaining period until maturity was six basis points and nine basis points as of June 30, 2022 and December 31, 2021, respectively.

One loan held for investment with an unpaid principal balance of $14.7 million was delinquent and on non-accrual status as of June 30, 2022 and December 31, 2021. The Company had $3.7 million in collateral-based reserves for this loan as of both June 30, 2022 and December 31, 2021 and has not recorded any interest related to this loan since it went on non-accrual status in 2019. All other loans were current as of June 30, 2022 and December 31, 2021. The amortized cost basis of loans that were current as of June 30, 2022 and December 31, 2021 was $236.3 million and $258.6 million, respectively. As of June 30, 2022, $48.6 million, $160.5 million, and $28.3 million of the loans that were current were originated in 2022, 2021, and 2019, respectively. Other than the defaulted loan noted above, the Company has not experienced any delinquencies related to loans held for investment.

Provision (Benefit) for Credit Losses

Provision (Benefit) for Credit Losses—The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Condensed Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the three and six months ended June 30, 2022 and 2021:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Provision (Benefit) for Credit Losses (in thousands)	2022		2021		2022		2021
Provision (benefit) for loan losses	$	(71)	$	(75)	$	(177)	$	(662)
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Provision (benefit) for credit losses	$	(4,840)	$	(4,326)	$	(14,338)	$	(15,646)

Net Warehouse Interest Income

Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also occasionally fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. The Company had a portfolio of participating interests in loans held for investment that was accounted for as a secured borrowing and paid off at the end of the second quarter of 2021. The Company recognized Net warehouse interest income on the unpaid principal balance of the loans and secured borrowing for the three and six months ended June 30, 2021. Included in Net warehouse interest income for the three and six months ended June 30, 2022 and 2021 are the following components:

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Net Warehouse Interest Income (in thousands)	2022		2021		2022		2021
Warehouse interest income - loans held for sale	$	12,175	$	7,863	$	21,038	$	16,981
Warehouse interest expense - loans held for sale		(8,468)		(4,979)		(13,801)		(11,638)
Net warehouse interest income - loans held for sale	$	3,707	$	2,884	$	7,237	$	5,343
Warehouse interest income - loans held for investment	$	3,015	$	2,962	$	5,365	$	6,190
Warehouse interest expense - loans held for investment		(1,454)		(1,216)		(2,561)		(2,348)
Warehouse interest income - secured borrowings		—		883		—		1,748
Warehouse interest expense - secured borrowings		—		(883)		—		(1,748)
Net warehouse interest income - loans held for investment	$	1,561	$	1,746	$	2,804	$	3,842
Total net warehouse interest income	$	5,268	$	4,630	$	10,041	$	9,185

Statement of Cash Flows

        Statement of Cash Flows—For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of June 30, 2022 and 2021 and December 31, 2021 and 2020.

	June 30,				December 31,
(in thousands)	2022		2021		2021		2020
Cash and cash equivalents	$	151,252	$	326,518	$	305,635	$	321,097
Restricted cash		34,361		15,842		42,812		19,432
Pledged cash and cash equivalents (NOTE 9)		10,149		47,396		44,733		17,473
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	195,762	$	389,756	$	393,180	$	358,002

Income Taxes

        Income Taxes—The Company records the realizable excess tax benefits from stock-based compensation as a reduction to income tax expense. The realizable excess tax benefits were $0.3 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively, and $5.2 million for each of the six months ended June 30, 2022 and 2021.

Contracts with Customers

Contracts with Customers—A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. The majority of the Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the majority all of the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and six months ended June 30, 2022 and 2021:  

	For the three months ended				For the six months ended
	June 30,				June 30,
Description (in thousands)	2022		2021		2022		2021		Statement of income line item
Certain loan origination fees	$	53,281	$	43,222	$	90,646	$	67,123	Loan origination and debt brokerage fees, net
Property sales broker fees		46,386		22,454		69,784		31,496	Property sales broker fees
Investment management fees		10,282		3,815		22,930		6,551	Investment management fees
Application fees, subscription revenues, other revenues from LIHTC operations, and other revenues		35,198		4,113		50,855		7,627	Other revenues
Total revenues derived from contracts with customers	$	145,147	$	73,604	$	234,215	$	112,797

Litigation

Litigation—In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition.

Recently Adopted and Recently Announced Accounting Pronouncements

Recently Adopted and Recently Announced Accounting Pronouncements—There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2021 Form 10-K. There are no recently announced but not yet effective accounting pronouncements that are expected to have a material impact to the Company as of June 30, 2022.

Reclassifications

Reclassifications—The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year    presentation.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Components of Provision (Benefit) for Credit Losses

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Provision (Benefit) for Credit Losses (in thousands)	2022		2021		2022		2021
Provision (benefit) for loan losses	$	(71)	$	(75)	$	(177)	$	(662)
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Provision (benefit) for credit losses	$	(4,840)	$	(4,326)	$	(14,338)	$	(15,646)

Schedule of Net Warehouse Interest Income

	For the three months ended				For the six months ended
	June 30,				June 30,
Components of Net Warehouse Interest Income (in thousands)	2022		2021		2022		2021
Warehouse interest income - loans held for sale	$	12,175	$	7,863	$	21,038	$	16,981
Warehouse interest expense - loans held for sale		(8,468)		(4,979)		(13,801)		(11,638)
Net warehouse interest income - loans held for sale	$	3,707	$	2,884	$	7,237	$	5,343
Warehouse interest income - loans held for investment	$	3,015	$	2,962	$	5,365	$	6,190
Warehouse interest expense - loans held for investment		(1,454)		(1,216)		(2,561)		(2,348)
Warehouse interest income - secured borrowings		—		883		—		1,748
Warehouse interest expense - secured borrowings		—		(883)		—		(1,748)
Net warehouse interest income - loans held for investment	$	1,561	$	1,746	$	2,804	$	3,842
Total net warehouse interest income	$	5,268	$	4,630	$	10,041	$	9,185

Schedule of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

	June 30,				December 31,
(in thousands)	2022		2021		2021		2020
Cash and cash equivalents	$	151,252	$	326,518	$	305,635	$	321,097
Restricted cash		34,361		15,842		42,812		19,432
Pledged cash and cash equivalents (NOTE 9)		10,149		47,396		44,733		17,473
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	195,762	$	389,756	$	393,180	$	358,002

Schedule of Contracts with Customers

	For the three months ended				For the six months ended
	June 30,				June 30,
Description (in thousands)	2022		2021		2022		2021		Statement of income line item
Certain loan origination fees	$	53,281	$	43,222	$	90,646	$	67,123	Loan origination and debt brokerage fees, net
Property sales broker fees		46,386		22,454		69,784		31,496	Property sales broker fees
Investment management fees		10,282		3,815		22,930		6,551	Investment management fees
Application fees, subscription revenues, other revenues from LIHTC operations, and other revenues		35,198		4,113		50,855		7,627	Other revenues
Total revenues derived from contracts with customers	$	145,147	$	73,604	$	234,215	$	112,797

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MORTGAGE SERVICING RIGHTS (Tables)

6 Months Ended

Jun. 30, 2022

MORTGAGE SERVICING RIGHTS

Schedule of Activity Related to MSRs

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of MSRs (in thousands)	2022		2021		2022		2021
Beginning balance	$	976,554	$	909,884	$	953,845	$	862,813
Additions, following the sale of loan		60,445		57,300		137,299		153,940
Amortization		(47,098)		(43,914)		(93,455)		(86,466)
Pre-payments and write-offs		(11,156)		(7,751)		(18,944)		(14,768)
Ending balance	$	978,745	$	915,519	$	978,745	$	915,519

Summary of Components of Net Carrying Value of MSRs

Components of MSRs (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	1,617,975	$	1,548,870
Accumulated amortization		(639,230)		(595,025)
Net carrying value	$	978,745	$	953,845

Schedule of Expected Amortization of MSRs

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	92,455
Year Ending December 31,
2023	$	177,502
2024		159,556
2025		136,593
2026		115,353
2027		97,384
Thereafter		199,902
Total	$	978,745

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GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS (Tables)

6 Months Ended

Jun. 30, 2022

GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS

Summary of Allowance for Risk-Sharing Obligations

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Allowance for Risk-Sharing Obligations (in thousands)	2022		2021		2022		2021
Beginning balance	$	53,244	$	64,580	$	62,636	$	75,313
Provision (benefit) for risk-sharing obligations		(4,769)		(4,251)		(14,161)		(14,984)
Write-offs		—		—		—		—
Ending balance	$	48,475	$	60,329	$	48,475	$	60,329

Schedule of Activity Related to Guaranty Obligation

	For the three months ended				For the six months ended
	June 30,				June 30,
Roll Forward of Guaranty Obligation (in thousands)	2022		2021		2022		2021
Beginning balance	$	46,490	$	51,836	$	47,378	$	52,306
Additions, following the sale of loan		1,759		853		3,310		2,574
Amortization and write-offs		(2,600)		(2,320)		(5,039)		(4,511)
Ending balance	$	45,649	$	50,369	$	45,649	$	50,369

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WAREHOUSE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2022

WAREHOUSE NOTES PAYABLE

Schedule of notes payable

	June 30, 2022
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility	Amount		Amount		Capacity		Balance		Interest rate(1)
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	105,286	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		272,369	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		287,275	Adjusted Term SOFR plus 1.35%
Agency Warehouse Facility #4		200,000		225,000		425,000		128,251	Adjusted Term SOFR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		68,804	Adjusted Term SOFR plus 1.45%
Agency Warehouse Facility #6		150,000		50,000		200,000		—	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,075,000	$	1,840,000	$	3,915,000	$	861,985
Fannie Mae repurchase agreement, uncommitted line and open maturity		—		1,500,000		1,500,000		71,119
Total Agency Warehouse Facilities	$	2,075,000	$	3,340,000	$	5,415,000	$	933,104
Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	Adjusted Term SOFR plus 1.80%
Interim Warehouse Facility #2		100,000		—		100,000		—	Adjusted Term SOFR plus 1.35% to 1.85%
Interim Warehouse Facility #3		200,000		—		200,000		163,468	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities	$	454,810	$	—	$	454,810	$	183,278
Tax Credit Equity Warehouse Facility	$	30,000	$	—	$	30,000	$	9,777	Adjusted Daily SOFR plus 3.00%
Debt issuance costs		—		—		—		(482)
Total warehouse facilities	$	2,559,810	$	3,340,000	$	5,899,810	$	1,125,677

(1) Interest rate presented does not include the effect of any applicable interest rate floors.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2022

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of Goodwill

	For the six months ended
	June 30,
Roll Forward of Goodwill (in thousands)	2022		2021
Beginning balance	$	698,635	$	248,958
Additions from acquisitions		213,874		17,507
Measurement-period adjustments		25,372		—
Impairment		—		—
Ending balance	$	937,881	$	266,465

Goodwill by Reportable Segment (in thousands)	As of June 30, 2022
Capital Markets	$	448,048
Servicing & Asset Management		489,833
Corporate		—
Ending balance	$	937,881

Schedule of Activity Related to Other Intangible Assets

	For the six months ended
	June 30,
Roll Forward of Other Intangible Assets (in thousands)	2022		2021
Beginning balance	$	183,904	$	1,880
Additions from acquisitions		31,000		504
Amortization		(7,880)		(831)
Ending balance	$	207,024	$	1,553

Summary of Components of Net Carrying Value of Other Intangible Assets

Components of Other Intangible Assets (in thousands)	June 30, 2022		December 31, 2021
Gross value	$	220,682	$	189,682
Accumulated amortization		(13,658)		(5,778)
Net carrying value	$	207,024	$	183,904

Schedule of Expected Amortization of Other Intangible Assets

	Expected
(in thousands)	Amortization
Six Months Ending December 31,
2022	$	8,870
Year Ending December 31,
2023	$	17,303
2024		16,246
2025		16,206
2026		16,206
2027		16,206
Thereafter		115,987
Total	$	207,024

Schedule of Contingent Liability

	For the six months ended
	June 30,
Roll Forward of Contingent Consideration Liabilities (in thousands)	2022		2021
Beginning balance	$	125,808	$	28,829
Additions		117,000		7,504
Accretion and revaluation		1,823		906
Payments		(26,439)		—
Ending balance	$	218,192	$	37,239

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2022

FAIR VALUE MEASUREMENTS

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis

							Balance as of
(in thousands)	Level 1		Level 2		Level 3		Period End
June 30, 2022
Assets
Loans held for sale	$	—	$	931,516	$	—	$	931,516
Pledged securities		10,149		139,411		—		149,560
Derivative assets		—		—		59,810		59,810
Total	$	10,149	$	1,070,927	$	59,810	$	1,140,886
Liabilities
Derivative liabilities	$	—	$	—	$	17,176	$	17,176
Contingent consideration liabilities		—		—		218,192		218,192
Total	$	—	$	—	$	235,368	$	235,368
December 31, 2021
Assets
Loans held for sale	$	—	$	1,811,586	$	—	$	1,811,586
Pledged securities		44,733		104,263		—		148,996
Derivative assets		—		—		37,364		37,364
Total	$	44,733	$	1,915,849	$	37,364	$	1,997,946
Liabilities
Derivative liabilities	$	—	$	—	$	6,403	$	6,403
Contingent consideration liabilities		—		—		125,808		125,808
Total	$	—	$	—	$	132,211	$	132,211

Schedule of Roll Forward of Derivative Instruments

	For the three months ended				For the six months ended
	June 30,				June 30,
Derivative Assets and Liabilities, net (in thousands)	2022		2021		2022		2021
Beginning balance	$	99,623	$	48,880	$	30,961	$	44,720
Settlements		(211,543)		(211,771)		(277,921)		(341,515)
Realized gains recorded in earnings(1)		111,920		162,891		246,960		296,795
Unrealized gains (losses) recorded in earnings(1)		42,634		6,340		42,634		6,340
Ending balance	$	42,634	$	6,340	$	42,634	$	6,340

(1) Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Condensed Consolidated Statements of Income.

Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities

	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value		Valuation Technique	Unobservable Input (1)	Input Range (1)	Weighted Average (3)
Derivative assets	$	59,810	Discounted cash flow	Counterparty credit risk	—	—
Derivative liabilities	$	17,176	Discounted cash flow	Counterparty credit risk	—	—
Contingent consideration liabilities	$	218,192	Various(2)	Probability of earn-out achievement	65% - 100%	76%

(1) Significant increases in this input may lead to significantly lower fair value measurements.

(2) Primary valuation technique used was a Monte Carlo simulation analysis.

(3) Contingent consideration weighted based on maximum gross earn-out amount.

Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments

	June 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
(in thousands)	Amount		Value		Amount		Value
Financial Assets:
Cash and cash equivalents	$	151,252	$	151,252	$	305,635	$	305,635
Restricted cash		34,361		34,361		42,812		42,812
Pledged securities		149,560		149,560		148,996		148,996
Loans held for sale		931,516		931,516		1,811,586		1,811,586
Loans held for investment, net		247,243		248,383		269,125		270,826
Derivative assets		59,810		59,810		37,364		37,364
Total financial assets	$	1,573,742	$	1,574,882	$	2,615,518	$	2,617,219
Financial Liabilities:
Derivative liabilities	$	17,176	$	17,176	$	6,403	$	6,403
Contingent consideration liabilities		218,192		218,192		125,808		125,808
Warehouse notes payable		1,125,677		1,126,159		1,941,572		1,942,448
Notes payable		719,210		723,931		740,174		745,175
Total financial liabilities	$	2,080,255	$	2,085,458	$	2,813,957	$	2,819,834

Schedule of Fair Value of Derivative Instruments and Loans Held for Sale

			Fair Value Adjustment Components						Balance Sheet Location
													Fair Value
	Notional or		Estimated				Total						Adjustment
	Principal		Gain		Interest Rate		Fair Value		Derivative		Derivative		to Loans
(in thousands)	Amount		on Sale		Movement		Adjustment		Assets		Liabilities		Held for Sale
June 30, 2022
Rate lock commitments	$	820,439	$	20,105	$	12,556	$	32,661	$	33,386	$	(725)	$	—
Forward sale contracts		1,753,635		—		9,973		9,973		26,424		(16,451)		—
Loans held for sale		933,196		20,849		(22,529)		(1,680)		—		—		(1,680)
Total			$	40,954	$	—	$	40,954	$	59,810	$	(17,176)	$	(1,680)
December 31, 2021
Rate lock commitments	$	1,115,829	$	29,837	$	(4,604)	$	25,233	$	26,526	$	(1,293)	$	—
Forward sale contracts		2,881,224		—		5,728		5,728		10,838		(5,110)		—
Loans held for sale		1,765,395		47,315		(1,124)		46,191		—		—		46,191
Total			$	77,152	$	—	$	77,152	$	37,364	$	(6,403)	$	46,191

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FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES (Tables)

6 Months Ended

Jun. 30, 2022

FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Schedule of Pledged Securities at Fair Value

	June 30,				December 31,
Pledged Securities (in thousands)	2022		2021		2021		2020
Restricted cash	$	5,979	$	7,442	$	3,779	$	4,954
Money market funds		4,170		39,954		40,954		12,519
Total pledged cash and cash equivalents	$	10,149	$	47,396	$	44,733	$	17,473
Agency MBS		139,411		99,152		104,263		119,763
Total pledged securities, at fair value	$	149,560	$	146,548	$	148,996	$	137,236

Schedule of Investment Information Related to AFS Agency MBS

Fair Value and Amortized Cost of Agency MBS (in thousands)	June 30, 2022		December 31, 2021
Fair value	$	139,411	$	104,263
Amortized cost		139,737		100,847
Total gains for securities with net gains in AOCI		1,242		3,636
Total losses for securities with net losses in AOCI		(1,568)		(220)
Fair value of securities with unrealized losses		104,433		4,757

Schedule of Contractual Maturity Information Related to Agency MBS

	June 30, 2022
Detail of Agency MBS Maturities (in thousands)	Fair Value		Amortized Cost
Within one year	$	—	$	—
After one year through five years		13,901		13,903
After five years through ten years		100,704		100,835
After ten years		24,806		24,999
Total	$	139,411	$	139,737

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EARNINGS PER SHARE AND STOCKHOLDERS EQUITY (Tables)

6 Months Ended

Jun. 30, 2022

EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY

Schedule of Basic and Diluted EPS Under Two-Class Method

	For the three months ended June 30,				For the six months ended June 30,
EPS Calculations (in thousands, except per share amounts)	2022		2021		2022		2021
Calculation of basic EPS
Walker & Dunlop net income	$	54,286	$	56,058	$	125,495	$	114,110
Less: dividends and undistributed earnings allocated to participating securities		1,554		1,831		3,708		3,798
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Basic EPS	$	1.63	$	1.75	$	3.77	$	3.57
Calculation of diluted EPS
Net income applicable to common stockholders	$	52,732	$	54,227	$	121,787	$	110,312
Add: reallocation of dividends and undistributed earnings based on assumed conversion		9		14		27		34
Net income allocated to common stockholders	$	52,741	$	54,241	$	121,814	$	110,346
Weighted-average basic shares outstanding		32,388		31,019		32,304		30,922
Add: weighted-average diluted non-participating securities		306		351		353		400
Weighted-average diluted shares outstanding		32,694		31,370		32,657		31,322
Diluted EPS	$	1.61	$	1.73	$	3.73	$	3.52

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SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2022

SEGMENTS

Schedule of Segment Results and Total Assets

	For the three months ended June 30, 2022
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	102,085	$	520	$	—	$	102,605
Fair value of expected net cash flows from servicing, net			51,949		—		—		51,949
Servicing fees			—		74,260		—		74,260
Property sales broker fees			46,386		—		—		46,386
Investment management fees			—		10,282		—		10,282
Net warehouse interest income			3,707		1,561		—		5,268
Escrow earnings and other interest income			—		6,648		103		6,751
Other revenues			3,895		39,280		172		43,347
Total revenues		$	208,022	$	132,551	$	275	$	340,848
Expenses
Personnel		$	138,913	$	21,881	$	7,574	$	168,368
Amortization and depreciation			810		58,760		1,533		61,103
Provision (benefit) for credit losses			—		(4,840)		—		(4,840)
Interest expense on corporate debt			—		—		6,412		6,412
Other operating expenses			4,583		6,559		25,053		36,195
Total expenses		$	144,306	$	82,360	$	40,572	$	267,238
Income from operations		$	63,716	$	50,191	$	(40,297)	$	73,610
Income tax expense			16,476		12,850		(9,823)		19,503
Net income before noncontrolling interests		$	47,240	$	37,341	$	(30,474)	$	54,107
Less: net income (loss) from noncontrolling interests			—		(179)		—		(179)
Walker & Dunlop net income		$	47,240	$	37,520	$	(30,474)	$	54,286

	For the three months ended June 30, 2021
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	105,583	$	1,889	$	—	$	107,472
Fair value of expected net cash flows from servicing, net			61,849		—		—		61,849
Servicing fees			—		69,052		—		69,052
Property sales broker fees			22,454		—		—		22,454
Investment management fees			—		3,815		—		3,815
Net warehouse interest income			2,884		1,746		—		4,630
Escrow earnings and other interest income			—		1,768		55		1,823
Other revenues			3,135		6,885		296		10,316
Total revenues		$	195,905	$	85,155	$	351	$	281,411
Expenses
Personnel		$	119,994	$	9,447	$	11,980	$	141,421
Amortization and depreciation			18		47,395		1,097		48,510
Provision (benefit) for credit losses			—		(4,326)		—		(4,326)
Interest expense on corporate debt			—		—		1,760		1,760
Other operating expenses			3,598		2,604		13,546		19,748
Total expenses		$	123,610	$	55,120	$	28,383	$	207,113
Income from operations		$	72,295	$	30,035	$	(28,032)	$	74,298
Income tax expense			17,739		7,475		(6,974)		18,240
Net income before noncontrolling interests		$	54,556	$	22,560	$	(21,058)	$	56,058
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	54,556	$	22,560	$	(21,058)	$	56,058

	As of and for the six months ended June 30, 2022
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	183,908	$	1,007	$	—	$	184,915
Fair value of expected net cash flows from servicing, net			104,679		—		—		104,679
Servicing fees			—		146,941		—		146,941
Property sales broker fees			69,784		—		—		69,784
Investment management fees			—		22,930		—		22,930
Net warehouse interest income			7,237		2,804		—		10,041
Escrow earnings and other interest income			—		8,406		148		8,554
Other revenues			6,658		61,529		44,261		112,448
Total revenues		$	372,266	$	243,617	$	44,409	$	660,292
Expenses
Personnel		$	237,639	$	40,519	$	34,391	$	312,549
Amortization and depreciation			810		113,691		2,754		117,255
Provision (benefit) for credit losses			—		(14,338)		—		(14,338)
Interest expense on corporate debt			—		—		12,817		12,817
Other operating expenses			10,694		12,678		45,037		68,409
Total expenses		$	249,143	$	152,550	$	94,999	$	496,692
Income from operations		$	123,123	$	91,067	$	(50,590)	$	163,600
Income tax expense			29,323		21,689		(12,049)		38,963
Net income before noncontrolling interests		$	93,800	$	69,378	$	(38,541)	$	124,637
Less: net income (loss) from noncontrolling interests			—		(858)		—		(858)
Walker & Dunlop net income		$	93,800	$	70,236	$	(38,541)	$	125,495
Total assets		$	1,611,951	$	2,607,990	$	314,831	$	4,534,772

	As of and for the six months ended June 30, 2021
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	180,878	$	2,473	$	—	$	183,351
Fair value of expected net cash flows from servicing, net			119,784		—		—		119,784
Servicing fees			—		135,030		—		135,030
Property sales broker fees			31,496		—		—		31,496
Investment management fees			—		6,551		—		6,551
Net warehouse interest income			5,343		3,842		—		9,185
Escrow earnings and other interest income			—		3,767		173		3,940
Other revenues			5,695		11,657		(990)		16,362
Total revenues		$	343,196	$	163,320	$	(817)	$	505,699
Expenses
Personnel		$	192,629	$	16,558	$	28,449	$	237,636
Amortization and depreciation			539		92,773		2,069		95,381
Provision (benefit) for credit losses			—		(15,646)		—		(15,646)
Interest expense on corporate debt			—		—		3,525		3,525
Other operating expenses			7,000		4,857		25,478		37,335
Total expenses		$	200,168	$	98,542	$	59,521	$	358,231
Income from operations		$	143,028	$	64,778	$	(60,338)	$	147,468
Income tax expense			32,354		14,653		(13,649)		33,358
Net income before noncontrolling interests		$	110,674	$	50,125	$	(46,689)	$	114,110
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	110,674	$	50,125	$	(46,689)	$	114,110
Total assets		$	2,070,549	$	1,404,895	$	467,677	$	3,943,121

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VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Jun. 30, 2022

Consolidated VIEs

Schedule of the Carrying Value and Classification of Assets and Liabilities of VIEs

Consolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	1,101	$	—
Restricted cash		1,049		—
Receivables, net		34,051		—
Other Assets		49,224		54,880
Total assets of consolidated VIEs	$	85,425	$	54,880
Liabilities:
Other liabilities	$	33,662	$	36,480
Total liabilities of consolidated VIEs	$	33,662	$	36,480

Nonconsolidated VIEs

Schedule of the Carrying Value and Classification of Assets and Liabilities of VIEs

Nonconsolidated VIEs (in thousands)		June 30, 2022		December 31, 2021
Assets
Committed investments in tax credit equity	$	187,393	$	177,322
Other assets: Equity-method investments		55,970		74,997
Total interests in nonconsolidated VIEs	$	243,363	$	252,319
Liabilities
Commitments to fund investments in tax credit equity		173,740		162,747
Total commitments to fund nonconsolidated VIEs	$	173,740	$	162,747
Maximum exposure to losses(1)(2)	$	243,363	$	252,319

(1) Maximum exposure determined as Total interests in nonconsolidated VIEs. The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above.

(2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Mortgage Banking Activities
Co-broker fees	$ 4.4	$ 3.6	$ 10.3	$ 8.9

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Investment, Net (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan
Financial Asset, Not Past Due
Loans Held-for-Investment, Net
Amortized cost of loans held for investment, current	$ 236,300,000	$ 258,600,000
Loans originated in 2022	48,600,000
Loans originated in 2021	160,500,000
Loan originated in 2019	$ 28,300,000
Loans Held for Investment
Loans Held-for-Investment, Net
Number of loans held for investment | loan	9	12
Unpaid principal balance of loans held for investment	$ 252,100,000	$ 274,500,000
Net unamortized deferred fees and costs	900,000	1,200,000
Allowance for loan losses	$ 4,000,000.0	$ 4,200,000
Reasonable and supportable forecast period used for determining CECL reserves	1 year
Number of delinquent loans	1	1
Charge off rate for forecasted period	0.11%	0.15%
Charge off rate for the remaining period	0.06%	0.09%
Loans held for investment, delinquent	$ 14,700,000	$ 14,700,000
Number of loans on nonaccrual status | loan	1	1
Loans, non-accrual status	$ 14,700,000	$ 14,700,000
Specific reserve for loan	$ 3,700,000	$ 3,700,000
Loans Held for Investment | Maximum
Loans Held-for-Investment, Net
Loan term (in years)	3 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Provision for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Components of Provision for Credit Losses
Provision (benefit) for loan losses	$ (71)	$ (75)	$ (177)	$ (662)
Provision (benefit) for risk-sharing obligations	(4,769)	(4,251)	(14,161)	(14,984)
Provision (benefit) for credit losses	$ (4,840)	$ (4,326)	$ (14,338)	$ (15,646)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Warehouse Interest Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net Warehouse Interest Income
Net warehouse interest income	$ 5,268	$ 4,630	$ 10,041	$ 9,185
Loans Held for Sale
Net Warehouse Interest Income
Warehouse interest income	12,175	7,863	21,038	16,981
Warehouse interest expense	(8,468)	(4,979)	(13,801)	(11,638)
Net warehouse interest income	3,707	2,884	7,237	5,343
Loans Held for Investment
Net Warehouse Interest Income
Warehouse interest income	3,015	2,962	5,365	6,190
Warehouse interest expense	(1,454)	(1,216)	(2,561)	(2,348)
Net warehouse interest income	$ 1,561	1,746	$ 2,804	3,842
Secured Borrowings
Net Warehouse Interest Income
Warehouse interest income		883		1,748
Warehouse interest expense		$ (883)		$ (1,748)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flows (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents
Cash and cash equivalents	$ 151,252	$ 305,635	$ 326,518	$ 321,097
Restricted cash	34,361	42,812	15,842	19,432
Pledged cash and cash equivalents (NOTE 9)	10,149	44,733	47,396	17,473
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$ 195,762	$ 393,180	$ 389,756	$ 358,002

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Excess tax benefits recognized	$ 0.3	$ 1.2	$ 5.2	$ 5.2

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contracts with Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Contracts with Customers
Revenue from contracts with customer	$ 145,147	$ 73,604	$ 234,215	$ 112,797
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Revenues	Revenues	Revenues	Revenues
Loan Origination Fees
Contracts with Customers
Revenue from contracts with customer	$ 53,281	$ 43,222	$ 90,646	$ 67,123
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Revenues	Revenues	Revenues	Revenues
Property Sales Broker Fees
Contracts with Customers
Revenue from contracts with customer	$ 46,386	$ 22,454	$ 69,784	$ 31,496
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Revenues	Revenues	Revenues	Revenues
Investment management fees
Contracts with Customers
Revenue from contracts with customer	$ 10,282	$ 3,815	$ 22,930	$ 6,551
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Revenues	Revenues	Revenues	Revenues
Application fees, subscription revenues, other revenues from LIHTC operations, and other revenues
Contracts with Customers
Revenue from contracts with customer	$ 35,198	$ 4,113	$ 50,855	$ 7,627
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Revenues	Revenues	Revenues	Revenues

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MORTGAGE SERVICING RIGHTS - Fair Value Disclosures (Detail) - MSRs - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Servicing
Fair value of the MSRs	$ 1,300.0	$ 1,300.0
Sensitivity Analysis of Fair Value, example 1, impact of percent adverse change in discount rate, percent	1.00%
Decrease in fair value as a result of 100 basis point increase in discount rate	$ 40.6
Sensitivity Analysis of Fair Value, example 2, impact of percent adverse change in discount rate, percent	2.00%
Decrease in fair value as a result of 200 basis point increase in discount rate	$ 78.6

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MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to MSRs (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Mortgage Servicing Rights
Beginning balance			$ 953,845
Ending balance	$ 978,745		978,745
MSRs
Mortgage Servicing Rights
Beginning balance	976,554	$ 909,884	953,845	$ 862,813
Additions, following sale of loan	60,445	57,300	137,299	153,940
Amortization	(47,098)	(43,914)	(93,455)	(86,466)
Pre-payments and write-offs	(11,156)	(7,751)	(18,944)	(14,768)
Ending balance	$ 978,745	$ 915,519	$ 978,745	$ 915,519

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MORTGAGE SERVICING RIGHTS - Summary of Components of Net Carrying Value of Acquired and Originated MSRs (Detail) - MSRs - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Mortgage Servicing Rights Acquired and Originated
Gross value	$ 1,617,975	$ 1,548,870
Accumulated amortization	(639,230)	(595,025)
Net carrying value	$ 978,745	$ 953,845

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MORTGAGE SERVICING RIGHTS - Schedule of Expected Amortization of MSRs (Detail) - MSRs - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Future amortization
Six Months Ending December 31, 2022	$ 92,455
2023	177,502
2024	159,556
2025	136,593
2026	115,353
2027	97,384
Thereafter	199,902
Net carrying value	$ 978,745	$ 953,845

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GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Summary of Allowance for Risk-Sharing Obligations (Detail) $ in Thousands	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) loan	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) loan	Mar. 31, 2021	Dec. 31, 2020
Allowance for Risk-Sharing Contracts
Beginning balance	$ 53,244	$ 62,636		$ 64,580	$ 62,636	$ 75,313	$ 75,313
Provision (benefit) for risk-sharing obligations	(4,769)			(4,251)	(14,161)	(14,984)
Ending balance	48,475	$ 53,244	$ 62,636	60,329	$ 48,475	60,329	$ 62,636
Number of defaulted loans | loan					3		3
Amount of specific reserves placed on defaulted at risk loans	10,800		$ 10,300		$ 10,800		$ 10,300
Fannie Mae DUS program
Allowance for Risk-Sharing Contracts
Maximum quantifiable contingent liability associated with guarantees	$ 10,500,000			$ 9,500,000	$ 10,500,000	$ 9,500,000
Fannie Mae DUS Program
Allowance for Risk-Sharing Contracts
Period of time used to determine the historical loss rate		10 years
Charge off rate for forecasted period	0.022%	0.03%		0.03%	0.022%	0.03%		0.04%	0.06%
Charge off rate for the remaining period	0.012%		0.018%		0.012%		0.018%
At risk servicing portfolio	$ 51,200,000				$ 51,200,000
CECL reserve for at risk servicing portfolio	$ 37,700		$ 52,300		$ 37,700		$ 52,300
Weighted average remaining life of the at risk servicing portfolio			7 years 6 months		7 years 3 months 18 days

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GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Schedule of Activity Related to Guaranty Obligation (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS
Guaranty obligation, net of accumulated amortization - beginning balance	$ 46,490	$ 51,836	$ 47,378	$ 52,306
Additions, following the sale of loan	1,759	853	3,310	2,574
Amortization	(2,600)	(2,320)	(5,039)	(4,511)
Guaranty obligation, net of accumulated amortization - ending balance	$ 45,649	$ 50,369	$ 45,649	$ 50,369

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SERVICING - (Detail) - Loans serviced - USD ($) $ in Billions	Jun. 30, 2022	Dec. 31, 2021
Servicing
Servicing portfolio loans unpaid principal balance	$ 119.0	$ 115.7
Custodial escrow accounts	$ 2.3	$ 3.7

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WAREHOUSE NOTES PAYABLE - Summary Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Warehouse notes payable
Committed Amount	$ 2,559,810		$ 2,559,810
Uncommitted Amount	3,340,000		3,340,000
Total Facility Capacity	5,899,810		5,899,810
Outstanding Balance	1,125,677		1,125,677	$ 1,941,572
Debt issuance costs	(482)		(482)
Loans Held for Sale | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	2,075,000		2,075,000
Uncommitted Amount	3,340,000		3,340,000
Total Facility Capacity	5,415,000		5,415,000
Outstanding Balance	933,104		933,104
National Banks | Agency Warehouse Facility
Warehouse notes payable
Total Facility Capacity	3,900,000		3,900,000
National Banks | Interim Warehouse Facility
Warehouse notes payable
Total Facility Capacity	500,000		500,000
National Banks | Tax Credit Equity Warehouse Facility
Warehouse notes payable
Committed Amount	30,000		30,000
Total Facility Capacity	30,000		30,000
Outstanding Balance	9,777		$ 9,777
Maturity date			Aug. 30, 2022
National Banks | Tax Credit Equity Warehouse Facility | 30-day LIBOR
Warehouse notes payable
Percentage added to reference rate		3.00%
National Banks | Tax Credit Equity Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate			3.00%
National Banks | Tax Credit Equity Warehouse Facility | Adjusted Term SOFR | Minimum
Warehouse notes payable
Interest rate floor			1.50%
National Banks | Loans Held for Sale | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	2,075,000		$ 2,075,000
Uncommitted Amount	1,840,000		1,840,000
Total Facility Capacity	3,915,000		3,915,000
Outstanding Balance	861,985		861,985
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	425,000		425,000
Total Facility Capacity	425,000		425,000
Outstanding Balance	105,286		$ 105,286
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate			1.30%
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	700,000		$ 700,000
Uncommitted Amount	300,000		300,000
Total Facility Capacity	1,000,000		1,000,000
Outstanding Balance	$ 272,369		$ 272,369
Maturity date	Apr. 13, 2023
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate	1.30%		1.30%
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	$ 600,000		$ 600,000
Uncommitted Amount	265,000		265,000
Total Facility Capacity	865,000		865,000
Outstanding Balance	$ 287,275		$ 287,275
Maturity date	May 15, 2023
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate	1.35%		1.35%
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | Adjusted Term SOFR | Minimum
Warehouse notes payable
Interest rate floor	0.15%
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	$ 200,000		$ 200,000
Uncommitted Amount	225,000		225,000
Total Facility Capacity	425,000	$ 350,000	425,000
Outstanding Balance	$ 128,251		$ 128,251
Maturity date	Jun. 22, 2023
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate	1.30%		1.30%
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility
Warehouse notes payable
Uncommitted Amount	$ 1,000,000		$ 1,000,000
Total Facility Capacity	1,000,000		1,000,000
Outstanding Balance	68,804		$ 68,804
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate			1.45%
National Banks | Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility
Warehouse notes payable
Committed Amount	150,000		$ 150,000
Uncommitted Amount	50,000		50,000
Total Facility Capacity	200,000		$ 200,000
National Banks | Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | 30-day LIBOR
Warehouse notes payable
Percentage added to reference rate			1.30%
National Banks | Loans Held for Investment | Interim Warehouse Facility
Warehouse notes payable
Committed Amount	454,810		$ 454,810
Total Facility Capacity	454,810		454,810
Outstanding Balance	183,278		183,278
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility
Warehouse notes payable
Committed Amount	135,000		135,000
Total Facility Capacity	$ 135,000		$ 135,000
Maturity date	May 15, 2023
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | Adjusted Term SOFR
Warehouse notes payable
Percentage added to reference rate	1.80%		1.80%
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility
Warehouse notes payable
Committed Amount	$ 100,000		$ 100,000
Total Facility Capacity	100,000		$ 100,000
Maturity date		Dec. 13, 2023
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | Adjusted Term SOFR | Minimum
Warehouse notes payable
Percentage added to reference rate			1.35%	1.35%
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | Adjusted Term SOFR | Maximum
Warehouse notes payable
Percentage added to reference rate		1.85%	1.85%
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility
Warehouse notes payable
Committed Amount	200,000		$ 200,000
Total Facility Capacity	200,000		200,000
Outstanding Balance	163,468		$ 163,468
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | 30-day LIBOR | Minimum
Warehouse notes payable
Percentage added to reference rate			1.75%
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | 30-day LIBOR | Maximum
Warehouse notes payable
Percentage added to reference rate			3.25%
National Banks | Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility
Warehouse notes payable
Committed Amount	19,810		$ 19,810
Total Facility Capacity	19,810		19,810
Outstanding Balance	19,810		$ 19,810
National Banks | Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | 30-day LIBOR
Warehouse notes payable
Percentage added to reference rate			3.00%
Fannie Mae | Loans Held for Sale | Fannie Mae Repurchase Agreement, Uncommitted Line and Open Maturity | Agency Warehouse Facility
Warehouse notes payable
Uncommitted Amount	1,500,000		$ 1,500,000
Total Facility Capacity	1,500,000		1,500,000
Outstanding Balance	$ 71,119		$ 71,119

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Goodwill [Roll Forward]
Beginning balance	$ 698,635	$ 248,958
Additions from acquisitions	213,874	17,507
Measurement-period adjustments	25,372
Ending balance	$ 937,881	$ 266,465

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GOODWILL AND OTHER INTANGIBLE ASSETS - GeoPhy Acquisition (Detail) $ in Thousands		6 Months Ended	12 Months Ended
	Feb. 28, 2022 USD ($)	Jun. 30, 2022 USD ($) segment	Dec. 31, 2021 USD ($) segment	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Acquisitions
Receivable forgiven		$ 5,460
Gain on remeasurement of equity investment to fair value prior to acquisition of controlling interest		39,641
Goodwill recognized		$ 937,881	$ 698,635	$ 266,465	$ 248,958
Number of reportable segments | segment		3	1
Measurement-period adjustments		$ 25,372
Annual small balance lending volume goal by 2025		5,000,000
Annual appraisal revenue goal by 2025		$ 75,000
Expected period of significant appraisal revenue growth		5 years
Maximum
Acquisitions
Contingent consideration liability earnout period		5 years
Discounted Cash Flows | Measurement Input, Discount Rate
Fair value valuation
Investment, Measurement Input	0.170
Capital Markets
Acquisitions
Goodwill recognized		$ 448,048
Apprise
Acquisitions
Book value of equity method investment prior to transaction	$ 18,900
Fair value of equity method investment prior to transaction	58,500
Apprise | Other Revenues
Acquisitions
Gain on remeasurement of equity investment to fair value prior to acquisition of controlling interest	$ 39,600
Apprise
Acquisitions
Total ownership interest	100.00%
GeoPhy
Acquisitions
Ownership interest acquired	100.00%
Cash consideration	$ 87,600
Receivable forgiven	5,500
Contingent consideration liabilities	117,000
Total consideration	$ 210,100
Contingent consideration liability earnout period	4 years
Maximum earnout of contingent consideration	$ 205,000
Estimated undiscounted maximum earnout of contingent consideration	$ 132,700
Estimated maximum percentage earnout of contingent consideration	65.00%
Liability recognized as a percentage of the maximum consideration which may be paid	57.00%
Deferred tax assets	$ 9,400
GeoPhy | Contingent Consideration Liability, Apprise Portion | Probability-weighted Expected Return | Probability of earnout achievement
Fair value valuation
Contingent consideration liabilities, Measurement input	0.170
GeoPhy | Contingent Consideration Liability, Small Balance Portion | Probability-weighted Expected Return | Probability of earnout achievement
Fair value valuation
Contingent consideration liabilities, Measurement input	0.145
GeoPhy | Technology intangible assets
Acquisitions
Intangible assets acquired	$ 31,000
Amortization period of intangible assets	10 years
GeoPhy | Capital Markets
Acquisitions
Goodwill recognized	$ 211,900
Apprise
Acquisitions
Ownership interest acquired	50.00%
Alliant Capital, LTD
Acquisitions
Measurement-period adjustments		$ 29,700

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GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Reportable Segment (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Goodwill [Line Items]
Goodwill.	$ 937,881	$ 698,635	$ 266,465	$ 248,958
Capital Markets
Goodwill [Line Items]
Goodwill.	448,048
Servicing and Asset Management
Goodwill [Line Items]
Goodwill.	$ 489,833

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GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - Other intangible assets - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Other intangible assets
Beginning Balance	$ 183,904	$ 1,880
Additions from acquisitions	31,000	504
Amortization	(7,880)	(831)
Ending balance	207,024	1,553	$ 183,904
Components of other intangible assets
Gross value	220,682		189,682
Accumulated amortization	(13,658)		(5,778)
Net carrying value	$ 207,024	$ 1,553	$ 183,904

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Expected Amortization of Other Intangible Assets (Details) - Other intangible assets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Future amortization
Six Months Ending December 31, 2022	$ 8,870
2023	17,303
2024	16,246
2025	16,206
2026	16,206
2027	16,206
Thereafter	115,987
Net carrying value	$ 207,024	$ 183,904	$ 1,553	$ 1,880

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GOODWILL AND OTHER INTANGIBLE ASSETS - Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Contingent consideration liabilities
Additions	$ 117,000	$ 7,504
Stock issued for settlement of contingent liabilities	$ 8,750
Maximum
Contingent consideration liabilities
Contingent consideration liability earnout period	5 years
Other Liabilities
Contingent consideration liabilities
Beginning balance	$ 125,808	28,829
Additions	117,000	7,504
Accretion and revaluation	1,823	906
Payments	(26,439)
Ending balance	$ 218,192	$ 37,239

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FAIR VALUE MEASUREMENTS - Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Assets
Loans held for sale	$ 931,516	$ 1,811,586
Pledged securities	149,560	148,996	$ 146,548	$ 137,236
Derivative assets	59,810	37,364
Liabilities
Derivative liabilities	17,176	6,403
Recurring Basis
Assets
Loans held for sale	931,516	1,811,586
Pledged securities	149,560	148,996
Derivative assets	59,810	37,364
Total financial assets	1,140,886	1,997,946
Liabilities
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	125,808
Total financial liabilities	235,368	132,211
Level 1 | Recurring Basis
Assets
Pledged securities	10,149	44,733
Total financial assets	10,149	44,733
Level 2 | Recurring Basis
Assets
Loans held for sale	931,516	1,811,586
Pledged securities	139,411	104,263
Total financial assets	1,070,927	1,915,849
Level 3 | Recurring Basis
Assets
Derivative assets	59,810	37,364
Total financial assets	59,810	37,364
Liabilities
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	125,808
Total financial liabilities	$ 235,368	$ 132,211

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FAIR VALUE MEASUREMENTS - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Fair Value Measurements
Amount of transfers between any of the levels within the fair value hierarchy	$ 0
Maximum
Fair Value Measurements
Contract term	60 days

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FAIR VALUE MEASUREMENTS - Schedule of Roll Forward of Derivative Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Derivative assets and liabilities, net
Beginning balance	$ 99,623	$ 48,880	$ 30,961	$ 44,720
Settlements	(211,543)	(211,771)	(277,921)	(341,515)
Realized gains recorded in earnings	111,920	162,891	246,960	296,795
Unrealized gains recorded in earnings	42,634	6,340	42,634	6,340
Ending balance	$ 42,634	$ 6,340	$ 42,634	$ 6,340

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FAIR VALUE MEASUREMENTS - Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities (Detail) $ in Thousands	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value Measurements
Derivative assets	$ 59,810	$ 37,364
Derivative liabilities	17,176	6,403
Recurring Basis
Fair Value Measurements
Derivative assets	59,810	37,364
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	125,808
Recurring Basis | Level 3
Fair Value Measurements
Derivative assets	59,810	37,364
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	$ 125,808
Recurring Basis | Level 3 | Derivative Liabilities | Discounted Cash Flow
Fair Value Measurements
Derivative liabilities	17,176
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Various
Fair Value Measurements
Contingent consideration liabilities	$ 218,192
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Various | Probability of earnout achievement | Minimum
Fair Value Measurements
Contingent consideration liabilities, Measurement input	0.65
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Various | Probability of earnout achievement | Maximum
Fair Value Measurements
Contingent consideration liabilities, Measurement input	1
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Various | Probability of earnout achievement | Weighted Average
Fair Value Measurements
Contingent consideration liabilities, Measurement input	0.76
Recurring Basis | Level 3 | Derivative Assets | Discounted Cash Flow
Fair Value Measurements
Derivative assets	$ 59,810

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FAIR VALUE MEASUREMENTS - Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Financial assets:
Cash and cash equivalents	$ 151,252	$ 305,635	$ 326,518	$ 321,097
Restricted cash	34,361	42,812	15,842	19,432
Pledged securities	149,560	148,996	$ 146,548	$ 137,236
Loans held for sale	931,516	1,811,586
Loans held for investment, net	247,243	269,125
Derivative assets	59,810	37,364
Financial liabilities:
Derivative liabilities	17,176	6,403
Warehouse notes payable	1,125,677	1,941,572
Note payable	719,210	740,174
Carrying Amount
Financial assets:
Cash and cash equivalents	151,252	305,635
Restricted cash	34,361	42,812
Pledged securities	149,560	148,996
Loans held for sale	931,516	1,811,586
Loans held for investment, net	247,243	269,125
Derivative assets	59,810	37,364
Total financial assets	1,573,742	2,615,518
Financial liabilities:
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	125,808
Warehouse notes payable	1,125,677	1,941,572
Note payable	719,210	740,174
Total financial liabilities	2,080,255	2,813,957
Fair Value
Financial assets:
Cash and cash equivalents	151,252	305,635
Restricted cash	34,361	42,812
Pledged securities	149,560	148,996
Loans held for sale	931,516	1,811,586
Loans held for investment, net	248,383	270,826
Derivative assets	59,810	37,364
Total financial assets	1,574,882	2,617,219
Financial liabilities:
Derivative liabilities	17,176	6,403
Contingent consideration liabilities	218,192	125,808
Warehouse notes payable	1,126,159	1,942,448
Note payable	723,931	745,175
Total financial liabilities	$ 2,085,458	$ 2,819,834

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FAIR VALUE MEASUREMENTS - General information (Detail)	6 Months Ended
	Jun. 30, 2022
Loans Held for Sale
Other information
Period of originated loans within which they are transferred or sold	60 days
Money Market Funds | Maximum
Other information
Maximum term of maturity of pledged securities	90 days

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FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Derivative Instruments and Loans Held for Sale (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Derivative notional amount and balance sheet location
Estimated Gain on Sale	$ 40,954	$ 77,152
Total Fair Value Adjustment	40,954	77,152
Derivative assets	59,810	37,364
Derivative Liabilities	(17,176)	(6,403)
Fair Value Adjustment to Loans Held for Sale	(1,680)	46,191
Loans Held for Sale
Derivative notional amount and balance sheet location
Notional or Principal Amount	933,196	1,765,395
Estimated Gain on Sale	20,849	47,315
Interest Rate Movement	(22,529)	(1,124)
Total Fair Value Adjustment	(1,680)	46,191
Fair Value Adjustment to Loans Held for Sale	(1,680)	46,191
Forward Sale Contracts
Derivative notional amount and balance sheet location
Notional or Principal Amount	1,753,635	2,881,224
Interest Rate Movement	9,973	5,728
Total Fair Value Adjustment	9,973	5,728
Derivative assets	26,424	10,838
Derivative Liabilities	(16,451)	(5,110)
Rate Lock Commitments
Derivative notional amount and balance sheet location
Notional or Principal Amount	820,439	1,115,829
Estimated Gain on Sale	20,105	29,837
Interest Rate Movement	12,556	(4,604)
Total Fair Value Adjustment	32,661	25,233
Derivative assets	33,386	26,526
Derivative Liabilities	$ (725)	$ (1,293)

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FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Commitments (Detail) - DUS Risk-Sharing Obligations - Fannie Mae $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
LITIGATION, COMMITMENTS, AND CONTINGENCIES
Period of funding for collateral requirement	48 months
Amount of additional capital required to be funded over the next 48 months	$ 70.4
Net worth	621,600.0
Minimum liquid assets to be maintained to meet operational liquidity requirements	52.8
Operational liquidity	116.0
Minimum
LITIGATION, COMMITMENTS, AND CONTINGENCIES
Net worth requirement	$ 266.2
New Tier 2 loans
LITIGATION, COMMITMENTS, AND CONTINGENCIES
Collateral requirements percentage	0.75%
Period of funding for collateral requirement	48 months
New Tier 2 loans | Money Market Funds
LITIGATION, COMMITMENTS, AND CONTINGENCIES
Restricted liquidity collateral reduction percentage	5.00%
New Tier 2 loans | Agency Mortgage Backed Securities
LITIGATION, COMMITMENTS, AND CONTINGENCIES
Restricted liquidity collateral reduction percentage	4.00%

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FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Pledged Securities at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Pledged Securities
Restricted cash	$ 5,979	$ 3,779	$ 7,442	$ 4,954
Money market funds	4,170	40,954	39,954	12,519
Total pledged cash and cash equivalents	10,149	44,733	47,396	17,473
Agency MBS	139,411	104,263	99,152	119,763
Pledged securities, at fair value	$ 149,560	$ 148,996	$ 146,548	$ 137,236

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FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Agency Multifamily Mortgage Based Securities Pledged Securities (Detail) - Agency Mortgage Backed Securities - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Investments in Agency debt securities
Fair Value	$ 139,411	$ 104,263
Amortized Cost	139,737	100,847
Total gains for securities with net gains in AOCI	1,242	3,636
Total losses for securities with net losses in AOCI	(1,568)	(220)
Fair value of securities with unrealized losses	104,433	4,757
Maturities - Fair Value
After one year through five years	13,901
After five years through ten years	100,704
After ten years	24,806
Total	139,411	104,263
Maturities - Amortized Cost
After one year through five years	13,903
After five years through ten years	100,835
After ten years	24,999
Total	$ 139,737	$ 100,847

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EARNINGS PER SHARE AND STOCKHOLDERS EQUITY - Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Calculation of basic EPS
Walker and Dunlop net income	$ 54,286	$ 71,209	$ 56,058	$ 58,052	$ 125,495	$ 114,110
Less: dividends and undistributed earnings allocated to participating securities	1,554		1,831		3,708	3,798
Net income applicable to common stockholders	$ 52,732		$ 54,227		$ 121,787	$ 110,312
Basic weighted average shares outstanding	32,388		31,019		32,304	30,922
Basic EPS	$ 1.63		$ 1.75		$ 3.77	$ 3.57
Calculation of diluted EPS
Add: reallocation of dividends and undistributed earnings based on assumed conversion	$ 9		$ 14		$ 27	$ 34
Net income allocated to common stockholders	$ 52,741		$ 54,241		$ 121,814	$ 110,346
Add: weighted-average diluted non-participating securities	306		351		353	400
Weighted average diluted shares outstanding	32,694		31,370		32,657	31,322
Diluted EPS	$ 1.61		$ 1.73		$ 3.73	$ 3.52
Shares outstanding excluded from computation of earnings per share	136				87

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EARNINGS PER SHARE AND STOCKHOLDERS EQUITY - Noncash Transactions (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Noncash transactions not impacting cash paid on Statements of Cash Flows
Stock issued for settlement of contingent liabilities	$ 8,750
Number of joint ventures with operating agreement changes causing reconsideration of consolidation conclusion | item	3
Additional paid-in capital ("APIC")	$ 403,668	$ 393,022
Noncontrolling interests	32,294	28,055
Receivables, net	236,786	212,019
Other assets	413,201	364,746
Other liabilities	$ 784,719	$ 714,250
Consolidation of joint venture
Noncash transactions not impacting cash paid on Statements of Cash Flows
Number of joint ventures with operating agreement changes causing reconsideration of consolidation conclusion | item	3
Additional paid-in capital ("APIC")	$ 3,700
Noncontrolling interests	6,800
Receivables, net	35,000
Other assets	(21,300)
Other liabilities	$ 3,600

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EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Restricted Stock Awards and Share Repurchases (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended	3 Months Ended
	Aug. 03, 2022	Feb. 28, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
Repurchases of common stock
Reduction of equity for retirement of repurchased shares			$ 12,302	$ 27,049	$ 816	$ 13,374
Dividends
Cash dividends paid per common share			$ 0.60	$ 0.60	$ 0.50	$ 0.50
Cash dividends declared per common share	$ 0.60
Share Repurchase Program 2022
Repurchases of common stock
Shares repurchased during the period			109	0
Weighted average market price of shares repurchased and retired (in dollars per share)			$ 101.77
Reduction of equity for retirement of repurchased shares			$ 11,100
Share repurchase program, period for repurchases		12 months
Authorized share repurchase capacity remaining			$ 63,900
Share Repurchase Program 2022 | Maximum
Repurchases of common stock
Repurchase authorization		$ 75,000

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SEGMENTS (Detail) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Jun. 30, 2022 USD ($) segment	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Segments
Number of operating segments | segment					3
Revenues
Total revenues	$ 340,848		$ 281,411		$ 660,292	$ 505,699
Expenses
Personnel	168,368		141,421		312,549	237,636
Amortization and depreciation	61,103		48,510		117,255	95,381
Provision (benefit) for credit losses	(4,840)		(4,326)		(14,338)	(15,646)
Interest expense on corporate debt	6,412		1,760		12,817	3,525
Other operating expenses	36,195		19,748		68,409	37,335
Total expenses	267,238		207,113		496,692	358,231
Income from operations	73,610		74,298		163,600	147,468
Income tax expense	19,503		18,240		38,963	33,358
Net income before noncontrolling interests	54,107		56,058		124,637	114,110
Less: net income (loss) from noncontrolling interests	(179)	$ (679)			(858)
Walker and Dunlop net income	54,286	$ 71,209	56,058	$ 58,052	125,495	114,110
Total assets	4,534,772		3,943,121		4,534,772	3,943,121	$ 5,205,989
Loan origination and debt brokerage fees, Net
Revenues
Total revenues	102,605		107,472		184,915	183,351
Fair value of expected net cash flows from servicing, net
Revenues
Total revenues	51,949		61,849		104,679	119,784
Servicing fees
Revenues
Total revenues	74,260		69,052		146,941	135,030
Property sales broker fees
Revenues
Total revenues	46,386		22,454		69,784	31,496
Investment management fees
Revenues
Total revenues	10,282		3,815		22,930	6,551
Net warehouse interest income
Revenues
Total revenues	5,268		4,630		10,041	9,185
Escrow earnings and other interest income
Revenues
Total revenues	6,751		1,823		8,554	3,940
Other revenue
Revenues
Total revenues	43,347		10,316		112,448	16,362
Operating Segments | Capital Markets
Revenues
Total revenues	208,022		195,905		372,266	343,196
Expenses
Personnel	138,913		119,994		237,639	192,629
Amortization and depreciation	810		18		810	539
Other operating expenses	4,583		3,598		10,694	7,000
Total expenses	144,306		123,610		249,143	200,168
Income from operations	63,716		72,295		123,123	143,028
Income tax expense	16,476		17,739		29,323	32,354
Net income before noncontrolling interests	47,240		54,556		93,800	110,674
Walker and Dunlop net income	47,240		54,556		93,800	110,674
Total assets	1,611,951		2,070,549		1,611,951	2,070,549
Operating Segments | Capital Markets | Loan origination and debt brokerage fees, Net
Revenues
Total revenues	102,085		105,583		183,908	180,878
Operating Segments | Capital Markets | Fair value of expected net cash flows from servicing, net
Revenues
Total revenues	51,949		61,849		104,679	119,784
Operating Segments | Capital Markets | Property sales broker fees
Revenues
Total revenues	46,386		22,454		69,784	31,496
Operating Segments | Capital Markets | Net warehouse interest income
Revenues
Total revenues	3,707		2,884		7,237	5,343
Operating Segments | Capital Markets | Other revenue
Revenues
Total revenues	3,895		3,135		6,658	5,695
Operating Segments | Servicing and Asset Management
Revenues
Total revenues	132,551		85,155		243,617	163,320
Expenses
Personnel	21,881		9,447		40,519	16,558
Amortization and depreciation	58,760		47,395		113,691	92,773
Provision (benefit) for credit losses	(4,840)		(4,326)		(14,338)	(15,646)
Other operating expenses	6,559		2,604		12,678	4,857
Total expenses	82,360		55,120		152,550	98,542
Income from operations	50,191		30,035		91,067	64,778
Income tax expense	12,850		7,475		21,689	14,653
Net income before noncontrolling interests	37,341		22,560		69,378	50,125
Less: net income (loss) from noncontrolling interests	(179)				(858)
Walker and Dunlop net income	37,520		22,560		70,236	50,125
Total assets	2,607,990		1,404,895		2,607,990	1,404,895
Operating Segments | Servicing and Asset Management | Loan origination and debt brokerage fees, Net
Revenues
Total revenues	520		1,889		1,007	2,473
Operating Segments | Servicing and Asset Management | Servicing fees
Revenues
Total revenues	74,260		69,052		146,941	135,030
Operating Segments | Servicing and Asset Management | Investment management fees
Revenues
Total revenues	10,282		3,815		22,930	6,551
Operating Segments | Servicing and Asset Management | Net warehouse interest income
Revenues
Total revenues	1,561		1,746		2,804	3,842
Operating Segments | Servicing and Asset Management | Escrow earnings and other interest income
Revenues
Total revenues	6,648		1,768		8,406	3,767
Operating Segments | Servicing and Asset Management | Other revenue
Revenues
Total revenues	39,280		6,885		61,529	11,657
Operating Segments | Corporate
Revenues
Total revenues	275		351		44,409	(817)
Expenses
Personnel	7,574		11,980		34,391	28,449
Amortization and depreciation	1,533		1,097		2,754	2,069
Interest expense on corporate debt	6,412		1,760		12,817	3,525
Other operating expenses	25,053		13,546		45,037	25,478
Total expenses	40,572		28,383		94,999	59,521
Income from operations	(40,297)		(28,032)		(50,590)	(60,338)
Income tax expense	(9,823)		(6,974)		(12,049)	(13,649)
Net income before noncontrolling interests	(30,474)		(21,058)		(38,541)	(46,689)
Walker and Dunlop net income	(30,474)		(21,058)		(38,541)	(46,689)
Total assets	314,831		467,677		314,831	467,677
Operating Segments | Corporate | Escrow earnings and other interest income
Revenues
Total revenues	103		55		148	173
Operating Segments | Corporate | Other revenue
Revenues
Total revenues	$ 172		$ 296		$ 44,261	$ (990)

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VARIABLE INTEREST ENTITIES (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Number of joint ventures with operating agreement changes causing reconsideration of consolidation conclusion | item	3
Assets
Cash and cash equivalents	$ 151,252	$ 305,635	$ 326,518	$ 321,097
Restricted cash	34,361	42,812	15,842	$ 19,432
Receivables, net	236,786	212,019
Committed investments in tax credit equity	187,393	177,322
Other assets	413,201	364,746
Total assets	4,534,772	5,205,989	$ 3,943,121
Liabilities
Commitments to fund investments in tax credit equity	173,740	162,747
Other Liabilities	784,719	714,250
Total liabilities	2,868,997	3,627,782
Consolidated VIEs
Assets
Cash and cash equivalents	1,101
Restricted cash	1,049
Receivables, net	34,051
Other assets	49,224	54,880
Total assets	85,425	54,880
Liabilities
Other Liabilities	33,662	36,480
Total liabilities	33,662	36,480
Nonconsolidated VIEs
Assets
Committed investments in tax credit equity	187,393	177,322
Other assets	55,970	74,997
Total assets	243,363	252,319
Liabilities
Commitments to fund investments in tax credit equity	173,740	162,747
Total liabilities	173,740	162,747
Maximum exposure	$ 243,363	$ 252,319