PennyMac Sees Slight Drop in Earnings, but Correspondent Volume Soars

PennyMac Mortgage Investment Trust earned $19.6 million in the fourth quarter – almost flat compared to 3Q – as it ramped up its correspondent division.

In the company’s earnings report, PennyMac CEO Stan Kurland predicted that the publicly traded REIT will lock in roughly $1.8 billion of product through the correspondent channel compared to $991 million of fundings in the fourth quarter.

Originally conceived as a distressed mortgage fund, PennyMac is shifting its strategy somewhat to focus on one of the most underserved sectors in the business: correspondent purchases.

“This was a transformative quarter for PMT,” said Kurland. “The company’s correspondent lending segment had a measurable positive impact on earnings.”

Kurland noted that the Calabasas-based company will continue to buy distressed mortgage assets – and servicing rights.

PennyMac is also a warehouse provider, but made no mention of that business in its brief earnings statement. PennyMac’s backers include BlackRock Financial. Its repo lender is Citigroup.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_533/pennymac-drop-earnings-1028794-1.html

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