Walker & Dunlop announced that it has agreed to buy the commercial mortgage servicing rights associated with a $3.8 billion servicing portfolio from Oppenheimer Multifamily Housing & Healthcare Finance, a subsidiary of Oppenheimer Holdings.
The acquisition, which is expected to close on June 20, would make Walker & Dunlop (NYSE: WD) the largest Department of Housing and Urban Development (HUD) multifamily and health-care servicer in the United States. The company will use available capital to fund the approximately $45 million purchase price.
The Oppenheimer portfolio is comprised of more than 480 multifamily and health-care loans insured by HUD.
"In 2012, Walker & Dunlop set a goal to increase the proportion of revenues that comes from servicing and other non-transaction-based fees,” said Stephen Theobald, Walker & Dunlop CFO, in a statement. “Over the past several years, the servicing portfolio has seen steady growth with the value of its revenue streams becoming increasingly apparent in the financial stability and flexibility provided to the business. The opportunity to acquire a portfolio of this size is rare and our strong cash position allowed us to move quickly to accelerate the accomplishment of our goal."
Walker & Dunlop ranked No. 13 on Affordable Housing Finance’s list of Top 25 lenders this year.
Closing of the deal is subject to certain conditions set forth in the purchase agreement, including but not limited to approval of the Government National Mortgage Association.
Headquartered in Bethesda, Md., Walker & Dunlop is one of the largest commercial real estate finance companies in the United States, providing financing and investment sales to owners of multifamily and commercial properties.