July 27, 2016 9:26 PM ET

Thrifts and Mortgage Finance

Company Overview of PennyMac Loan Services, LLC

Company Overview

PennyMac Loan Services, LLC provides home mortgage loans to borrowers and investors. It offers home purchase loans, such as adjustable rate mortgages, Federal Housing Administration (FHA) loans, fixed rate loans, jumbo loans, and Veteran’s Affairs (VA) loans; refinancing loans, which include adjustable rate mortgages, FHA positive equity refinancing, FHA streamline, fixed rate loans, HARP refinance programs, jumbo loans, and VA mortgage programs; and mortgage relief and assistance programs. It also specializes in small balance multifamily and commercial loans in the United States. PennyMac Loan Services, LLC has strategic partnerships with BlackRock Mortgage Ventures, LLC; and HC Partners, L...

3043 Townsgate Road

Suite 200

Westlake Village, CA 91361

United States

Founded in 2008

Phone:

818 224 7442

Fax:

818 224 7397

Key Executives for PennyMac Loan Services, LLC

Founder, Chairman and Chief Executive Officer
Age: 63
Chief Investment Officer
Age: 53
Chief Business Development Officer
Age: 39
Compensation as of Fiscal Year 2016.

PennyMac Loan Services, LLC Key Developments

PennyMac Loan Services, LLC and Private National Mortgage Acceptance Company, LLC Enter into an Amendment to Certain Loan and Security Agreement

On February 26, 2016, PennyMac Financial Services Inc., through two of its subsidiaries, PennyMac Loan Services, LLC (PLS) and Private National Mortgage Acceptance Company, LLC (PNMAC), entered into an amendment to that certain loan and security agreement, dated as of December 4, 2015, by and among PLS, as borrower, PNMAC, as guarantor, and Barclays Bank PLC (Barclays), as lender. Pursuant to the terms of the amendment, PLS increased the aggregate loan amount available to finance certain of its mortgage servicing rights (MSRs) relating to mortgage loans pooled into Fannie Mae and Freddie Mac securities from $20 million to $100 million. The Company, through PLS, is required to pay Barclays all fees and out of pocket expenses associated with the preparation of the amendment. All other terms and conditions of the loan agreement remain the same in all material respects.

Pennymac Loan Services, LLC Enters into Three Financing Arrangements with Barclays Bank PLC

On December 4, 2015, PennyMac Financial Services Inc. (the “company”), through two of its subsidiaries, PennyMac Loan Services, LLC (“PLS”) and Private National Mortgage Acceptance Company, LLC (“PNMAC”), entered into the following three financing arrangements with Barclays Bank PLC (“Barclays”): (a) a master repurchase agreement, by and among Barclays, as purchaser and agent, PLS, as seller and servicer, and PNMAC, as guarantor (the “repurchase agreement”); (b) a mortgage loan participation purchase and sale agreement, by and between PLS, as seller and servicer, and Barclays, as purchaser and agent (the “participation agreement”); and (c) a loan and security agreement, by and among PLS, as borrower, PNMAC, as guarantor, and Barclays, as lender (the “loan agreement”). Pursuant to the terms of the repurchase agreement, PLS may sell, and later repurchase, newly originated mortgage loans in an aggregate principal amount of up to $220 million, $20 million of which is committed. The committed amount is reduced by the sum of (a) the aggregate purchase price of all outstanding transactions under the participation agreement and related to the committed amount thereunder, and (b) the aggregate outstanding loan amount under the loan agreement. The uncommitted amount is reduced by the aggregate purchase price of all outstanding transactions under the participation agreement and related to the uncommitted amount thereunder. The repurchase agreement will be used to fund newly originated mortgage loans that are originated by PLS and held for sale and/or securitization. The scheduled maturity date of the repurchase agreement is December 2, 2016, and the obligations of PLS are fully guaranteed by PNMAC. The mortgage loans are serviced by PLS. Pursuant to the terms of the participation agreement, PLS may sell to Barclays participation certificates, each of which represents an undivided beneficial ownership interest in a pool of mortgage loans that have been pooled with Fannie Mae or Freddie Mac and are pending securitization, in an aggregate principal amount of up to $220 million, $20 million of which is committed. The committed amount is reduced by the sum of (a) the aggregate purchase price of all outstanding transactions under the Repurchase Agreement and related to the committed amount thereunder, and (b) the aggregate outstanding loan amount under the loan agreement. The uncommitted amount is reduced by the aggregate purchase price of all outstanding transactions under the repurchase agreement and related to the uncommitted amount thereunder. In connection with its sale of any participation certificate, PLS will also assign to an affiliate of Barclays a takeout commitment, which evidences PLS’ right to sell to a third party investor the security backed by the mortgage loans underlying the related participation certificate. The scheduled maturity date of the participation agreement is December 2, 2016, and the obligations of PLS are fully guaranteed by PNMAC. The mortgage loans are serviced by PLS. Pursuant to the terms of the loan agreement, PLS may finance certain of its mortgage servicing rights relating to mortgage loans pooled into Fannie Mae and Freddie Mac securities (the “MSRs”) in an aggregate loan amount not to exceed $20 million. The scheduled maturity date of the loan agreement is December 2, 2016, subject to a wind down period of up to one year following such maturity date and during which PLS shall pay on a monthly basis until reduced to zero at least one-twelfth (1/12) of the outstanding loan amount as of the maturity date. The obligations of PLS are fully guaranteed by PNMAC, and the mortgage loans relating to the MSRs are serviced by PLS. The principal amount of the borrowings under the loan agreement is based upon a percentage of the fair value ascribed by Barclays to the MSRs pledged by PLS (the “collateral value”), subject to the maximum loan amount described above. Under the loan agreement, PLS granted to Barclays a security interest in all of its right, title and interest in, to and under the MSRs pledged to secure such borrowings. The pledge of the MSRs and the related security interest are subject to separate acknowledgement agreements by and among Barclays, PLS and Fannie Mae or Freddie Mac, respectively, pursuant to which both Barclays and PLS acknowledge and reaffirm that such security interest is subordinated to all rights, powers and prerogatives of Fannie Mae or Freddie Mac, respectively, under its various agreements with PLS. On a monthly basis, or upon PLS’ repayment of the borrowing, PLS is required to pay Barclays accrued interest (at a rate reflective of the current market and based on LIBOR plus a margin) to the monthly settlement date or the date of such repayment, as applicable. PLS is also required to pay Barclays a fee for the structuring of the loan agreement, as well as certain other administrative fees, costs and expenses in connection with Barclays’ management and ongoing administration of the loan agreement. The loan agreement contains margin call provisions that require PLS, to the extent that the outstanding loan amount exceeds the collateral value of the MSRs at any time, to repay borrowings in the amount required to eliminate such excess. The loan agreement also requires PLS and the company to make certain representations and warranties and to maintain various financial and other covenants customary for this type of transaction, including financial covenants that are identical to the financial covenants required to be maintained by PLS and PNMAC under the repurchase agreement. In addition, the loan agreement contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and/or certain representations and warranties, cross-defaults, guarantor defaults, subservicer credit or termination events, bankruptcy or insolvency proceedings and other events of default customary for this type of transaction. The remedies for such events of default include the acceleration of the principal amount outstanding under the Loan Agreement and the liquidation by Barclays of the pledged MSRs then securing the borrowings.

Pennymac Financial Services, Inc. Enters into an Amendment to its Second Amended and Restated Loan and Security Agreement

On August 29, 2014, PennyMac Financial Services, Inc., through its subsidiaries, PennyMac Loan Services, LLC and Private National Mortgage Acceptance Company, LLC entered into an amendment to its Second Amended and Restated Loan and Security Agreement, dated as of March 27, 2012 with Credit Suisse First Boston Mortgage Capital LLC. Pursuant to the terms of the Loan and Security Agreement, CSFB made available to PLS a revolving credit facility in an amount not to exceed $117 million in order to finance certain mortgage servicing rights and receivables owned by PLS. The principal amount of each borrowing under the Loan and Security Agreement is based upon a percentage of the market value of the related mortgage servicing rights or receivable, as applicable, pledged by PLS. Upon PLS's repayment of a borrowing, PLS is required to repay CSFB the principal amount of such borrowing plus accrued interest to the date of such repayment. The obligations of PLS are fully guaranteed by PNMAC. The Company is a holding corporation and its sole asset is an equity interest in PNMAC. Under the terms of the amendment, the maximum loan amount provided for in the Loan and Security Agreement was increased from $117 million to $157 million. All other terms and conditions of the Loan and Security Agreement and the related guaranty remain the same in all material respects.

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