Nov. 6 (Bloomberg) -- PennyMac Mortgage Investment Trust, headed by former Countrywide Financial Corp. President Stanford Kurland, fell the most since it began trading in July following an unexpected loss.

PennyMac posted a net loss of $730,000, or 4 cents a share, for its initial two months of business ended Sept. 30, the Calabasas, California-based company said yesterday in a statement after the close of regular trading. Credit Suisse Group analyst Douglas Harter had forecast profit of 10 cents a share, according to a research note today.

After raising $335 million in an initial public offering, “aggressive” bids for home loans and related securities by competitors limited PennyMac’s purchases to $72.9 million of so- called non-agency mortgage bonds, bought for $69.5 million, with projected average lives of 1.5 years, the company said. It didn’t buy any unsecuritized debt the trust intended to focus on to capitalize on the loan modification programs and servicing business of its manager, according to its prospectus.

The investments represented a “slower deployment” than expected of the capital raised in the July 30 IPO by the real estate investment trust, which was formed to take advantage of depressed values amid the U.S. housing slump, Harter wrote.

PennyMac fell 77 cents, or 4.1 percent, to $17.81, a new low, in New York Stock Exchange composite trading. The shares have dropped 11 percent from their $20 initial price. Harter reduced his target price to $20.50, from $21.50, and rates the stock outperform.

‘We Still Believe’

The trust, which is managed by Chief Executive Officer Kurland’s Private National Mortgage Acceptance Co., said it reviewed more than $6.9 billion of loans and securities for possible purchase.

“While some market participants have been willing to accept lower yields and bid more aggressively, we still believe that it is in the best interest of our shareholders over the long term to remain patient,” Kurland said in the statement. “We expect the volume of troubled residential mortgage loans available for sale will continue to grow.”

The company bought short-lived securities so it can later reinvest “proceeds in suitable pools of mortgage loans or longer-lived, higher yielding mortgage-backed securities,” according to the statement. The bonds, which on average yield 7.1 percent, are backed by subprime, Alt-A, and jumbo loans and lack guarantees from government-supported Fannie Mae and Freddie Mac or agency Ginnie Mae.

PennyMac reported about $255 million in cash and short-term investments.

‘Disappointed’

“While we are disappointed by the slower pace of capital deployment we continue to believe that the residential mortgage whole loan sector will provide for attractive returns over a multiyear period,” Harter wrote.

Kurland left Countrywide, then the nation’s largest home lender, in 2006 and formed Private National Mortgage Acceptance last year with other former Countrywide executives. Bank of America Corp. bought Countrywide last year after the lender agreed to sell itself amid soaring U.S. foreclosures.

Invesco Mortgage Capital Inc., the Atlanta-based REIT that raised $170 million in a July IPO, reported yesterday $7.2 million in earnings in its first quarter. The company’s shares have climbed 3.2 percent to $20.64 since the offering.

Invesco Mortgage, run by an Invesco Ltd. unit, deployed all its capital, buying $694.1 million of agency mortgage securities, $104.4 million of non-agency home-loan bonds and $83.4 million of commercial mortgage-backed securities, using financing to acquire some the agency debt and CMBS.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net.

Last Updated: November 6, 2009 17:20 EST