Countrywide executives form PennyMac
The private sector mortgage industry is struggling to cope with its credit problem due to the Subprime lending debacle. This week, some former executives of Countrywide announced the creation of a new company called Private National Acceptance Company LLC, PennyMac for short.
The company plans to buy up risky loans to help struggling home owners stay put. PennyMac will go to banks and offer to buy distressed mortgages from them on the cheap. What they will say to the bank is "We will buy this mortgage from you at a discounted rate, but that rate will still be above what you would get paid back if this home goes into foreclosure." For many banks, the offer will come as a big relief. It'll allow them to clear bad or risky loans off their books and that'll improve their image with shareholders.
Stan Kurland (who left Countrywide (CFC) in late 2006, will head the new venture backed by investment management firms BlackRock Inc. (BLK) and Highfields Capital Management.) is PennyMac's CEO. He says once PennyMac owns the mortgage, the company will work with the homeowner to restructure the debt. That doesn't mean that homeowners have to brace themselves for a man with a briefcase knocking on the door, although they might. Kurland says most of the time they'll be able to arrange the restructuring online or over the phone.
Source: Marketplace
The company plans to buy up risky loans to help struggling home owners stay put. PennyMac will go to banks and offer to buy distressed mortgages from them on the cheap. What they will say to the bank is "We will buy this mortgage from you at a discounted rate, but that rate will still be above what you would get paid back if this home goes into foreclosure." For many banks, the offer will come as a big relief. It'll allow them to clear bad or risky loans off their books and that'll improve their image with shareholders.
Stan Kurland (who left Countrywide (CFC) in late 2006, will head the new venture backed by investment management firms BlackRock Inc. (BLK) and Highfields Capital Management.) is PennyMac's CEO. He says once PennyMac owns the mortgage, the company will work with the homeowner to restructure the debt. That doesn't mean that homeowners have to brace themselves for a man with a briefcase knocking on the door, although they might. Kurland says most of the time they'll be able to arrange the restructuring online or over the phone.
Source: Marketplace
Comments
Post a Comment