Recently announced, BlackRock Inc. and Highfields Capital Management will sponsor a new company, with the purpose of acquiring and restructuring distressed mortgage loans.
The new company which will be called Private National Mortgage Acceptance Company. LLC (PennyMac) has been formed by BlackRock Highlands, and a management team of mortgage industry veterans led by Stanford L. Kurland, PennyMac's Chairman and CEO.
The plan is to have PennyMac raise capital from private investors, acquire loans from financial institutions seeking to reduce their mortgage exposures, and seek to create value for both borrowers and investors through distinctive loan servicing.
PennyMac is a company that seeks to bring patient capital to an unprecedented distress in residential mortgages. Their management have enormous talent and experience in the mortgage business, making them well equipped to develop effective solutions for sellers of mortgage assets and homeowners alike.
There has been intense market focus on write-downs of mortgage-related securities, but whole loan losses have barely begun to materialize. Over the next two to three years, PennyMac anticipates that the volume of bank-held non-performing mortgages will grow dramatically. PennyMac will be extraordinarily well positioned as both a buyer and seller of these assets.
PennyMac's strategy is to avoid foreclosure, and instead restructure the loans of struggling borrowers so that they can continue paying and stay in their homes. As a specialty servicer without the legacy portfolio or business practices, PennyMac will have the flexibility to offer individual borrowers unique solutions to address their needs.
PennyMac's loan servicing activities will be managed through a proprietary servicing operation based in southern California.
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