What’s Larry Fink Up to with PennyMac?


Larry Fink, chairman and CEO of BlackRock Financial, is nobody’s fool—not by a long shot. He cut his teeth at First Boston many moons ago, helped shape the MBS market, and then went on to create a financial services powerhouse: BlackRock which has a sterling reputation as a company that knows how to value all types of mortgage assets, from obscure subprime MBS tranches to servicing rights. So, what’s behind BlackRock upping its stake in mortgage REIT PennyMac, a company originally conceived to buy troubled mortgage assets but is morphing into a correspondent lender/servicer? Who knows, but certain people in the mortgage industry are starting to take note. Consider this: PennyMac, a Stan Kurland operation, has hired plenty of former Bank of America/Countrywide veterans (no, Angelo Mozilo isn’t one of them) so we’re assuming the lines of communications between these two companies are quite strong. We already know that Citigroup is a repo lender to PennyMac which turns around and buys troubled mortgages from Citi. (Sweet.) So, just maybe B of A is talking to PennyMac about selling them some nonperforming loans or servicing rights? I’m just thinking out loud here. In case you missed it: PennyMac has a new HQ in Moorpark, Calif., and has about 45 openings. I would say the company is gearing up for some major growth. And that’s where Fink and BlackRock come in. They can serve as a financier to the publicly traded REIT and be comfortable with the collateral. In other words, who better than BlackRock knows what BoA’s junk is worth? There are bargains to be had out there—not necessarily in NPLs, but in MSRs…

One more note about PennyMac: Its share price is at $18.65, nearing a 52-week high. (Its low is $14.) The company has a price-to-earning ratio of just 5.57% and its dividend is 10.6%. Then again, maybe it’s the dividend that has attracted BlackRock. Interesting story…

We understand that JPMorgan Chase is having talks with Ocwen Financial about maybe that servicer taking on some of its problematic loans. For now it’s just that: talk. As for Ocwen, it seems every time we discuss the firm with executives in the mortgage industry they seem to keep bringing up the fact that it has a huge back office of busy servicing workers in India…

ROBO SUPER BOWL: We got us a servicing settlement. Whoopee!  Wait, what do you mean there is no official “term sheet” yet? OK, it’s coming. (We assume.) Anyway, pundits, bloggers and columnists have been blathering on the past week about how the consumer got shafted and blah, blah, blah. A few thoughts: many servicers and their attorneys broke the rules, cut corners and shafted the mortgage customer. That’s a fact. But what’s also a fact is that most of these consumers were in arrears. Two wrongs don’t make a right and maybe only King Solomon—he of great wisdom and 700 wives—can find a true and fair solution. But maybe some good will come out of this deal. Here’s how: supposedly, servicers will need to add staff to make sure they are processing loans and foreclosing correctly. And just maybe some poor man or woman who lost his job (and his house) will find new employment with a mortgage firm…

Who says there are no second acts in American lives? F. Scott Fitzgerald suggested as much—but he never worked in mortgage banking. This week we learned that Impac Mortgage Holdings has relaunched its correspondent business after a five-year hiatus. And industry vet John Robbins‘ new firm is weeks away from funding its first loan. Willie Newman is back running an expansion-minded wholesale unit at Cole Taylor Mortgage. Are there other mortgage comeback stories out there? Drop me a line at Paul.Muolo@SourceMedia.com…

Who says the GSEs don’t have a future? Adam Glassner recently left Ally Financial/GMAC to join Fannie Mae and then a few days later Tuck Reed left Wells Fargo to join the same GSE.

MORTGAGE PEOPLE: We understand that one very veteran mortgage insurance lobbyist will soon announce his retirement and then open his own consulting shop. Working title of the firm is GPS. Stay tuned. Meanwhile, Impac Mortgage, as part of that new correspondent effort, has hired Larry Matlin as vice president/managing director and Michael Falce as vice president/executive director.

WASHINGTON NEWS: Federal Reserve Board chairman Ben Bernanke is calling on regulators to “look carefully” at rules which diminish the origination of prudently underwritten mortgages, telling a gathering of home builders that the health of the housing market is central to the vitality of the economy as a whole. Addressing an audience of more than 2,500 builders and allied professionals attending the National Association of Home Builders‘ annual convention in Orlando, Bernanke said the fact that many creditworthy borrowers have found it difficult to obtain financing has limited the impact of the steps the central bank has taken to put downward pressure on long-term interest rates.

LOAN OFFICERS, BRAG A LITTLE: NMN and its sister publication Origination News, the most widely read news magazine in the broker/correspondent sector, has launched its annual loan officer survey. Eventually, we’ll publish features and rankings on the nation’s top LOs. To participate in our survey visit http://originationnews.com/losurvey.

MORTGAGE MEDIA: Congrats to our colleague Kate Berry who was among the first to report that B of A is telling its refi customers to take a number and wait 90 days. These stories only appear on the NMN and AB websites. For advertising info drop a line to Steven.Schloss@SourceMedia.com.

DATA STUFF: If you need a list of the nation’s top lenders ranked by refinancings drop an email to Deartra.Todd@SourceMedia.com and ask about our Quarterly Data Report. It’s a 50-page Excel spreadsheet. Also check out our exclusive mortgage data website: MortgageStats.com.

MUST ATTEND MORTGAGE SHOWS: From April 17-19 National Mortgage News and SourceMedia will hold their annual Mortgage Servicing Conference at the Omni Mandalay Hotel in Irving, Texas. For more information see the ads on our website or email Julie.Dienes@SourceMedia.com or click here http://www.nationalmortgagenews.com/conferences/ms/.

I’m on Twitter, discussing mortgage matters, and the lousy ski conditions in the East. Oh, and if you need a cool T-shirt: http://www.redbubble.com/people/sherbear/works/8356642-moriarty-was-real-black?p=t-shirt.

LAST WORD: Football season has ended and pitchers and catchers don’t report until Feb. 15. I don’t follow any other sports, though ESPN carries European soccer Saturday morning.

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