Welcome to Walker & Dunlop's Fourth Quarter 2012 Earnings Conference Call and Webcast. Hosting the call today from Walker & Dunlop is Willy Walker, Chief Executive Officer. He is joined by Debbie Wilson, Chief Financial Officer, and Claire Harvey, Vice President of Investor Relations. Today's call is being recorded and will be available for replay beginning at 11 a.m. Eastern. The dial-in number for the replay is 1800-677-7320. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following the presentation. (Operator instructions) It is now my pleasure to turn the floor over to Claire Harvey. Please go ahead.

Thank you, Jack. Good morning, everyone, and thank you for joining the Walker & Dunlop's fourth quarter and full year 2012 earnings call. Joining me this morning are Willy Walker, our Chairman, President and Chief Executive Officer; and Debbie Wilson, our Executive Vice President, Chief Financial Officer and Treasurer. This call is being webcast live on our website and a recording will be available later this morning. Both our earnings press release and website provide details on accessing the archived call. This morning, we posted our earnings release and presentation to the Investor Relations section of our website, www.walkerdunlop.com. During her remarks this morning, Debbie will be referring to slides in the posted presentation. So participants who are interested in following along should pull those up and have them available. We may reference certain non-GAAP financial metrics such as adjusted net income, adjusted earnings per diluted share, adjusted operating margins, adjusted income from operations and adjusted total expenses during the course of this call. Please refer to the earnings release and presentation for reconciliations of the GAAP and non-GAAP financial metrics and related explanations. Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements regarding future financial operating results, involve risks, uncertainties, and contingencies, many of which are beyond the control of Walker & Dunlop and which may cause actual results to differ materially from the anticipated results. Walker & Dunlop is under no obligation to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise. We expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our reports on file with SEC. Willy.

Walker & Dunlop’s 2007 numbers were $50 million in revenues, $16 million in income from operations, and $10 million in net income. As our 2012 earnings show, we grew revenues 5.1x to $257 million, adjusted income from operations 4.9x to $80 million, and adjusted net income 4.8x to $48 million. Growing a real estate finance company 5x in the past five years is an incredible accomplishment, particularly if you look at many of our peer companies that have just recently returned to the size and scale they had prior to the financial crisis. But what is equally as important and likely more exciting to our investors is where our dramatic growth positions us today as the economy recovers and a tremendous amount of commercial real estate debt comes up for refinancing. Walker & Dunlop’s new scale is not only reflected in our financial performance, but also in our industry rankings and market position. In 2007, we originated $1.2 billion of loans for Fannie Mae and were the 10th largest DUS lender. Today we are the largest DUS lender in the country, and originated $4.2 billion of loans with Fannie Mae in 2012. In 2007, we were not a licensed lender with Freddie Mac and HUD. So our originations with them were zero. In 2012, we were the fifth largest Freddie Mac seller/servicer in the country, originating $2.6 billion worth of loans, and we will likely be a top 5 lender with HUD when the rankings come out having originated 1.3 billion for them in 2012. We originated $849 million of loans with conduits and life insurance companies in 2007, and increased that to 1.4 billion of loans for these executions in 2012, and added two new origination teams to this platform. In 2007, we had one office with 90 employees.…

Thank you. As Willy highlighted, 2012 was transformative for Walker & Dunlop. The combination of the 20% plus organic origination growth and the acquisition of CWCapital catapulted the company to a new level. I am thrilled we effectively integrated CWCapital, exercised operational discipline, managed our financial metrics, and posted record results while we more than doubled our size. The fourth quarter is frequently the busiest quarter of the year and 2012 was no exception. People throughout the company worked incredibly hard to manage and integrate the business. And I’m very proud of the employees of Walker & Dunlop. I will focus my remarks today on the performance drivers for the fourth quarter and the year, the CWCapital acquisition and its impact on the company’s performance, point out some changes we are seeing in our financial metrics, and finish with a look at the balance sheet and the value of our MSRs. The bottom line is it was a record quarter, a fabulous year, and the company is poised for continued growth, diversification and profitability in 2013 and beyond. As we mentioned in our Q3 call, the CWCapital transaction generates both short-term and long-term changes to our financial statements. We are disclosing both GAAP and adjusted financial information because we believe the adjusted financial information provides meaningful data to benchmark our performance between periods. Slides 21 and 22 reconcile the gap and adjusted financial metrics. You may want to have these slides available as I speak to the quarter and the full year. Adjusted net income for the fourth quarter was $18.4 million or $0.54 per diluted share, a 67% increase from $11 million in Q4 of last year. GAAP net income was $11.5 million or $0.34 per diluted share, a 5% increase over the fourth quarter of 2011. In our…

Thank you, Debbie. I would like to pause for a moment before discussing our ongoing strategy to thank Debbie for the fantastic work at Walker & Dunlop over the past five years. Debbie has been one of my closest partners in growing Walker & Dunlop, including acquiring two businesses and taking Walker & Dunlop public. Any CEO and CFO, who have gone through the IPO process together, share a bond that they will carry forever. As we announced on Monday, Steve Theobald will be joining Walker & Dunlop on April 1 as our new Chief financial Officer. We are very excited to have someone with Steve’s background and leadership skills joining us. But for today our thanks are to Debbie for a job well done. You have been a great member of our team and we will miss you. I want to take a moment to talk about GSE reform before discussing Walker & Dunlop’s ongoing strategy. The Federal Housing Finance Agency, Fannie and Freddie’s regulator, came out with its 2013 scorecard yesterday. The scorecard calls for several initiatives, which Fannie and Freddie will be graded upon, including a joint back-office operation and shrinking their multi-family commitments by 10%. As it relates to the joint back-office operations if it ends up making Fannie and Freddie more efficient, that is net positive for the agencies and the consumer. With regard to the decrease in multi-family origination volumes, I will make a broad regulatory comment and then put some context around what this means to Walker & Dunlop and our industry. On the regulatory front, it is very surprising that FHFA would focus on decreasing multi-family origination volumes by 10% to ‘bring more private capital’ to the multi-family mortgage origination market. Fannie Mae and Freddie Mac’s multi-family finance businesses have huge private…

(Operator instructions) Our first question comes from Bose George with KBW. Please go ahead. Bose George – Keefe, Bruyette & Woods, Inc.: Hi, all. Good morning, and congratulations on a great year.

Thanks Bose. Bose George – Keefe, Bruyette & Woods, Inc.: I had a couple of questions. One first just on the gain on sale margin trends, we have seen a pretty good pickup in CMBS so far this year, I was wondering if there is much of an appetite in that market for multi-family and is there any impact there on margins you are seeing in your business?

Plenty of appetite Bose. CMBS has gotten to be able to price competitively on some transactions. But it has not as you can see – I mean, CMBS was coming back significantly in 2012, particularly at the end it has gotten out of the blocks very quickly in 2013 from an origination volume standpoint. But as you can see from the gain on sale margins, CMBS has not impacted those to date, and there is a heck of a lot of other asset classes that they can lend on where they don’t have to reduce their spreads to be able to compete on multi-family. Bose George – Keefe, Bruyette & Woods, Inc.: Okay, great. That makes sense. And then, actually going back to the comments you made on FHFA earlier, just wanted to clarify do you see that 10% as a one-time adjustment, or is it something they kind of periodically revisit?

So the scorecard is an annual process. And if you looked at what their 2012 scorecard laid out for multi-family, it was to do an analysis of whether Fannie and Freddie’s multi-family businesses could stand on their own, Fannie and Freddie did that analysis, submitted it to FHFA and then they came out with this as their 2013 objective. So to be honest with you, it is hard to tell. This is something that the FHFA just decided to go do. To put it in context Bose, the single family, one of the objectives in the scorecard for 2013 is that Fannie and Freddie in the single family business do $30 billion in public-private partnerships, so attracting private capital to their origination business. And as you well know, the single-family origination business is a multitrillion-dollar business. And so, they are trying to attract private capital through a very, very small percentage of their single-family business, whereas they are trying to reduce multi-family by 10% in a business that is predominantly private capital today. And so as I said in my prepared remarks, the objective doesn’t seem to make a whole lot of sense as it relates to Fannie and Freddie reform. But FHFA obviously has this scorecard, can put it out there on an annual basis, and to be perfectly blunt about it I have no idea what they will do in 2014 as far as the scorecard is concerned. I will make one final point, which is just the real issue is Fannie and Freddie reform on Capitol Hill, and there we have seen nothing that tells us that Congress is going to come together. There is such a different point of view between Fannie and Freddie and the role they play, where the Democrats think that Fannie and Freddie are doing 90% of single-family financings is perfectly fine, and the Republicans thinking that Fannie and Freddie shouldn’t even exist. That that chasm between the two sides is so wide that it is hard to see them coming together to figuring out what they might do as a more comprehensive approach to Fannie Freddie reform. Bose George – Keefe, Bruyette & Woods, Inc.: Okay, great. Thanks a lot.

Your next question from Brandon Dobell with William Blair. Please go ahead. Brandon Dobell – William Blair & Co.: Thanks. Good morning.

Good morning. Brandon Dobell – William Blair & Co.: Willy, I want to focus on first on your comments about the $5 million to $15 million in kind of I guess, let us call it net extra expenses if you are successful on the things you got planned for ’13, I want to make sure I understand kind of what that means either from a P&L perspective or would that just be from hiring people or the cost it would take to put some of these teams in place, I want to make sure I understand how you are positioning that?

Brandon, the different initiatives all have different start-up costs as far as from an operating standpoint, and then also capital that will be required from us to get them up and going. The most expensive would be the mortgage REIT, and getting that up and going and raising the capital into the mortgage REIT, because of the underwriting expenses and the banking expenses if we are successful at doing so. The second, if you will, most expensive is the fund business, just from finders’ fees on raising the amount of capital that we plan to raise in our funding – in our fund business. And then if you will, the cheapest in the group is the CMBS strategy of hiring the people to get the CMBS group up and going, originators, underwriters, credit people and the idea there is that we would pool somewhere between 100 million and 200 million of mortgages and then contribute them to other securitizations that are being managed by larger agencies – the issuers of the securities. And so we have got in all three instances significant work done in heading down all three of those, and as I said in the prepared remarks it will be great if we can accomplish all three, which would be at the high end of the cost range that we gave, but if we’re not successful on all three, the cost of starting up one or two of them will be somewhere in the midpoint between the $5 million and $15 million of start-up expenses. Brandon Dobell – William Blair & Co.: Okay. And then I guess in a related way, your comments around getting the business to 50% of revenues from more recurring sources in the next four or five years, obviously there are some assumptions in there about what a fund management business or mortgage REIT would be contributing to that revenue stream. Any more color on kind of what size you contemplated that it would take to you get to that kind of percentage revenue breakdown looking out five years?

A really good question. As you can imagine, we have modeled it out Brandon, but we were getting over our skis, if you will, as far as guidance. As you can – you can run the numbers on it and realize that they need to become multi-billion-dollar businesses for them to be able to provide us with the asset management fees and the servicing fees to be able to get those numbers to where we would like them to go. So, the real issue is that we plan on continuing to scale our agency business because it is a fantastic business and we see Fannie, Freddie and HUD remaining the dominant providers of capital in that space. And at the same time, we see huge opportunity in both other asset classes, as well as in multi-family on deals that don’t size for the agencies or for HUD. And so as we build our proprietary capital we will feed it into both our multi-family originations, as well as our non-multi-family originations due to the growth of our non-multi-family origination platform. Brandon Dobell – William Blair & Co.: Good. And then the final one from me, as you think about human capital additions on the origination side this year, in the context of scale on that business, should we expect a handful of additions, I know it is tough to find people and it is tough to predict how many you get, but it sounds like part of that scale comment you made was more people as opposed to just more productivity. So, should we expect you guys to be as aggressive as you have been in the past couple of years on finding people to put in the platform?

Yes, I think that is yes, very, very, very quickly – very much so as I said in my remarks, I think that the scale of our platform, our market position. I mean the difference in where we are today versus where we were just five years ago as it relates to why someone will want to come and work at Walker & Dunlop is dramatically different. And the platform and our scale today are big selling points, and so as a result of it our ability to attract talent is far greater today than it has ever been before, and we have ambitious goals to continue to grow our originations both in the multi-family specific space, as well as in the non-multi-family space. And whether that comes through just hiring or acquiring businesses Brandon, we may end up just going and acquiring platforms, and we may end up hiring individuals as we have done in the past. Brandon Dobell – William Blair & Co.: Okay, and then I guess one final one numbers question, it doesn’t sound like there was anything in the quarter like you had in the last quarter around shorter duration deals that change the origination fee structure or you kind of moved those relative numbers around. But I want to make sure that didn’t mention anything Debbie in your prepared remarks about kind of mix of business I guess this quarter?

No, Brandon. There were some with longer durations and some with shorter durations. But on average the answer is no. Brandon Dobell – William Blair & Co.: Okay, great. I appreciate it. Thanks a lot.

(Operator instructions) We will take our next question from Will Marks with JMP Securities. Please go ahead. Will Marks – JMP Securities: Thank you. Good morning Willy, Debbie, and Claire?

Hi Will. Will Marks – JMP Securities: I wanted to first ask on you talked about your rankings in Fannie Freddie, what is your approximate market share with the GSEs?

So, we have, if you take Fannie and Freddie, in 2012 Walker & Dunlop and CW combined well. So these numbers will be off of the 9.5 billion that was done combined, not the 7.1 billion that our financial results are based upon. Does that make sense? Will Marks – JMP Securities: Yes.

So, on the 9.5 billion that CW and W&D did, which is what Fannie and Freddie’s rankings are based off of because they put us both together in 2012. We had a 12.5% market share with Fannie Mae, and we had a 10% market share with Freddie Mac. So one point there that I think is important to keep in mind is that in 2000, if you look at that and you say, okay, great, Walker & Dunlop needs to grow market share with Fannie Mae, can they grow beyond 12.5%? Last year in Freddie Mac, CBRE originated $6 billion of loans with Freddie Mac and had over a 20% market share, 20.9% or something on Freddie Mac originations in 2012. And so, I truly believe that our ability to continue to scale with both agencies and take market share, given our market position is right there. And so, the scaling back of their aggregate origination numbers if for instance, just picking a number and this is not in any way using guidance, but if you took Walker & Dunlop from what our originations were in 2012, and moved them up with Fannie Mae, for instance, to 5 billion this coming year. You know that will be a 16.5% market share. And so there is plenty of room here for us to continue to gain scale and market share with the agencies based off of both our 2012 origination numbers, as well as other competitors and how much market share they have had. Will Marks – JMP Securities: That is great. Very helpful, thanks. A couple of other things, one is in your press release and I guess on the call you talk about the Mortgage Bankers Association estimating 14% annual growth until 2015, is there a specific 2013 number for that?

I know that they have year-on-year. I was trying to give a longer – they clearly have and we can get it to you. They clearly have a year-on-year number. I was trying to get a longer one just because we have these refinancing volumes that are coming through here. But we can get you the year-on-year. I don’t have it the top of my head. Will Marks – JMP Securities: And you have given your own guidance, it was not as important necessarily. On your number for this year, actually on the first quarter, the 1.9 to 2.4, if I just look at it, I think it is slide 10, the – it looks like a pretty – so we can’t compare it to last year, because of the acquisition. But how should we think about seasonality. Obviously the question is geared towards is your guidance too late, because the full year will be higher than the 10 to 12 based on it looks like a really strong first quarter?

You know, Will, one of the reasons why we updated our guidance in early January after getting, so as you know once we close the deal, we gave initial guidance of 8 to 10 for 2013, and then we updated that from 10 to 12. And so I think one of the things you are seeing here is that we are integrating CW and trying to you know, see what the combined platform can do, and everything so far has been that one plus one is equaling more than two, if you will. And so we are trying to watch it and be obviously as straightforward as we possibly can, and also not get if you will over our skis. So as we said in the call, we are maintaining our guidance of 10 billion to 12 billion for 2013, but as you can see from the Q1 guidance the team is executing very well so far this year. Will Marks – JMP Securities: Okay, thanks. Just one final question, can you remind me of the Fortress ability to sell stock, is it on now, it is sometime in March?

Will, they opened up as far as the deal on March 3. So they are free right now, if you will, from the lock-up. They are outside of the lock-up period. Will Marks – JMP Securities: For potentially all their stock, is that correct?

For potentially, with certain restrictions in there, but yes. Will Marks – JMP Securities: Okay. That is all from me. Thank you very much.

We have no further questions in queue at this time. I like to turn the call back over to Willy.

Great. I appreciate everyone joining us this morning. It was an absolutely fantastic year and a great fourth quarter. We are thrilled with the performance of the two companies coming together in 2012, and look forward to a very successful 2013. So thanks everyone for joining us this morning, and have a great day.

Thank you. This does conclude today’s conference. Please disconnect your lines at this time, and have a wonderful day.