Willy Walker: So I would say, I mean we have always tried J to zig when others have sagged. We did quite a bit of work during the great financial crisis and did an acquisition when nobody, well first of all, we weren’t a publicly traded company yet, so no one was looking at us, but we did a large transaction in the midst of the great financial crisis. Coming out of the pandemic, we made three acquisitions that have materially helped Walker & Dunlop post-pandemic and quite honestly through the great tightening. So I feel very good of our M&A capabilities and our ability to zig when others zag. I would say that from the lender standpoint I haven’t seen any knives that have fallen yet, if you will. Some of those, it took on a lot of floating rate risk seemed to be performing very well so far.
And so there really hasn’t been anything there that we would look at as it relates to taking advantage of someone’s risk profile having changed dramatically. I think that does go to where we are in the cycle and the fact that most people’s underwriting was more conservative than when we were heading into the great financial crisis. And then on the services side of things we are constantly looking. But first of all, anything we’re going to do now would have to be pretty significant in size and scale, just given our size and scale and wanting things to actually move the needle. And the second thing is that as Greg went through in our numbers, while we don’t like the transaction volumes are down and we don’t like the overall financial performance, the business model is performing two design.
$71 million of EBITDA in Q2 with deal volumes down over 60% is a fantastic quarter. It provides us with the cash flow to be able to keep our team in place, continue investing in our businesses and continue to invest in growth. And so taking on someone else’s problems at this time, it would have to be a screaming opportunity for us to go and not just say, we’ve got the opportunity here to inflate everything back when the market recovers as it has started to do and what we’re seeing today and take advantage of that on our own rather than going and taking some significant risk of bringing in someone else’s problems. But with that said, look, we’ve acquired 16 companies in Walker & Dunlop’s history and we’re constantly looking.
Jay McCanless: Okay, that’s great Willy. Always very helpful. Thanks for taking my questions.
Willy Walker: Thanks Jade.
Operator: [Operator Instructions] We’ll go next to Jade Rahmani with KBW.
Jade Rahmani: Thank you very much for taking the questions. Just on the GSE outlook more interested in W&D’s volumes, do you think that you can exceed 2Q levels for Fannie and Freddie? I think Freddie for the second half of last year, you averaged around $2 billion a quarter. And Fannie was pretty strong sequentially. There is usually an uptick and it seems from your peers that multi-family inflows are picking up and the GSE volumes are set to sequentially improve. So, just wondering if you can make any comment on that.
Willy Walker: I certainly hope so, Jade. We have fantastic relationships with both Fannie and Freddie, we have the client base and the bankers and brokers at Walker & Dunlop to continue to grow market share. Our market share with Freddie grew in the first half of 2023. Our market share with Fannie Mae was down through the first half, and that goes back to the large transaction we did in Q2 of 2022, which popped our market share with Fannie in the first half of 2022. Given the deliveries that we had to deliver to Fannie Mae and Freddie Mac in July after closing out Q1, I think, our positioning the lead tables will increase quite materially. And we continue to see very solid inflows as it relates to our agency pipeline. And so while both Greg and I tried to underscore the difficulty in projecting volumes right now, given, going back to the comment I made to Jade, we had a window there in late April, early May where cap rates adjusted financing, costs adjusted, and borrowers said, go.
And then all of a sudden externalities came in, the 10 year runs a little bit and borrowers say, don’t go. So, it’s a wildly rate sensitive market. And at the same time, every time we’ve seen the opportunity for clients to move forward, they are. So, it gives us optimism and at the same time, it also requires us to be tempered in our enthusiasm only because we’ve watched the market be sort of in sync for a moment and then back right away.
Jade Rahmani: Thanks for that. The gain on sale margins had a nice pickup. I haven’t been able to check the agency standalone margins versus last quarter, but sequentially margins did pick up nicely. You feel that they’ve kind of stabilized at this point and there isn’t as much pressure to provide borrowers with some savings through a lower imputed MSR gain. How are you feeling about the gain on sale margin outlook?
Willy Walker: Yes so, I’ve mentioned a number of times, Jade, that the agencies are very focused on profitability and affordability. I looked at Fannie Mae’s Q2 financial results and their G-fees year-on-year are flat, our S-fees year-on-year down precipitously. They have passed on to us and other partners the burden of pricing in this market. And we’ve talked to them about it. They want to partner with us and they’re being good partners, but their G-fees have stayed static while all of their partners SB’s have come down precipitously to deal with the sensitivity in pricing. So, we’re very hopeful that they realize that they’ve got a lot of capital to deploy that they have a – there is no obligation for them to hit their caps.
