LOS ANGELES (AP) - The former president and chief operating officer of
Countrywide Financial Corp. will run a new mortgage company unveiled Monday to
acquire and restructure distressed mortgages.
Stanford Kurland, who left Countrywide in late 2006, will head the new
venture backed by investment management firms BlackRock Inc. and Highfields
Capital Management.
The new company, Private National Mortgage, also known as PennyMac, intends
to help borrowers restructure loans so they can avoid foreclosure and maintain
payments.
Mortgage delinquency and default rates have risen rapidly since the middle
of 2007, leading to a growing number of foreclosures.
Countrywide, the nation's largest mortgage lender and servicer, lost about
$1.6 billion in the last six months of 2007 as higher defaults forced the lender
to boost its provisions for anticipated losses.
Earlier this year, Bank of America Corp. agreed to acquire Countrywide for
about $4 billion in stock.
Kurland will serve as chairman and chief executive officer of PennyMac. He
spent nearly three decades with Countrywide in a number of executive positions.
PennyMac will 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 loan servicing.
"We are pleased to sponsor PennyMac, a company that seeks to bring patient
capital to the unprecedented distress in residential mortgages," said Laurence
D. Fink, BlackRock chairman and CEO.
Jonathon S. Jacobson, Highfields co-founder and senior managing director,
said he expects the volume of bank-held, non-performing mortgages will grow
dramatically over the next three years.
"PennyMac will be extraordinarily well-positioned as both a buyer and
servicer of these assets," he said.
Kurland said the new company will have an advantage because it's unburdened
by a legacy portfolio and has the flexibility to offer unique solutions to
individual borrowers.
PennyMac's loan servicing activities will be managed through a proprietary
servicing operation based in Southern California.
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