PennyMac Projects Tripling of Mortgage Lending as Soured-Loan Firms Expand

PennyMac Mortgage Investment Trust (PMT), headed by former Countrywide Financial Corp. President Stanford Kurland, said that it expects to triple its originations of mortgages through other lenders this quarter.

The company’s correspondent lending volumes doubled last quarter to more than $50 million, Kurland said today in a statement reporting his Calabasas, California-based real estate investment trust’s earnings. In July, the lending was almost $50 million and the REIT is “targeting” fourth-quarter production reaching $200 million a month, Kurland said.

PennyMac, whose executives once helped run the largest U.S. mortgage lender, is among firms dealing in soured home loans seeking to expand in lending. Carrington Mortgage Services LLC said this week it acquired assets from American Home Equity Corp. Caliber Funding LLC, a lender backed by private-equity firm Lone Star Funds, said in June it hired Brian Simon from Freedom Mortgage Corp. as its chief executive officer. Simon said he would help Caliber “accelerate its growth strategy.”

“We see an increasing need for new market intermediaries,” Kurland said in the PennyMac statement.

His company’s opportunities stem in part from decisions by “large financial institutions” to “deemphasize their conduit activities” and from a potential drop later this year in the size of mortgages that government-backed Fannie Mae and Freddie Mac can guarantee, he said.

Bank of America

Bank of America Corp. (BAC), which bought Countrywide in 2008, said last month that changing capital rules were pushing it to take on fewer new contracts to oversee outstanding debt, a key part of the correspondent mortgage business in which closed loans are bought from the initial lenders and usually resold.

“We’re taking a very close look at the types of activities we’re originating and servicing, so on the front end, you’ll see actions where we look to scale back,” Bruce Thompson, the Charlotte, North Carolina-based bank’s chief financial officer, said during a July 19 conference call.

Bank of America, which in October joined JPMorgan Chase & Co. in ending the wholesale mortgage lending in which it funded debt arranged by brokers, originated $40.4 billion of first mortgages last quarter, down 29 percent from the first quarter.

Wells Fargo & Co., Bank of America and JPMorgan are the top U.S. home lenders, according to industry newsletter National Mortgage News.

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

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.