Walker & Dunlop said its 3Q13 commercial mortgage origination volume will end up in the range of between $1.7 billion and $1.9 billion, which is below its previous guidance of between $2 billion and $2.5 billion.
This is because of rising interest rates and a slowdown in lending activity by Fannie Mae and Freddie Mac as they look to stay under the lending caps imposed on them by the Federal Housing Finance Agency.
Willy Walker, chairman and CEO, said, “Many borrowers chose shorter-term, variable-rate financing during the quarter as the yield curve continued to steepen.
But, he continued, 4Q13 is looking better. "Rates have come down somewhat in September, and Fannie and Freddie appear very focused on lending their full allocations of $30 billion and $26 billion, respectively, before the end of the year. Year-to-date Walker & Dunlop will have originated between $6 billion and $6.2 billion of financing, compared to $4.2 billion for the same period in 2012, an increase of 43% to 48%."
By investor type for the third quarter, between 32% and 35% of financing came from Fannie Mae and 10% to 15% came from Freddie Mac. What the company defines as capital markets sources—conduits, life insurance companies and commercial banks—made up another 32% to 35%. The Department of Housing and Urban Development and Ginnie Mae contributed 12% to 15% and interim loans made up 4% to 6%.