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Former execs to buy home loans

March 21, 2008|From Times Wire Services

Countrywide Financial Corp.'s ex-president and at least nine other former executives of the giant mortgage lender are starting a company that will initially focus on buying home loans on behalf of private investors.

Stanford Kurland, who left Calabasas-based Countrywide in 2006, is leading the management team of Private National Mortgage Acceptance Co., or PennyMac, according to the company's website.

It plans to buy loans "from financial institutions seeking to reduce their mortgage exposures" in response to "the dislocations in the U.S. mortgage market."

PennyMac, also based in Calabasas, would join more than 70 funds, including ones run by Blackstone Group, Pacific Investment Management Co. and Goldman Sachs Group Inc., that have been created to snap up mortgage assets at cheap prices in the wake of the sharp drop in U.S. home prices.

"The motivating factors vary, but there's certainly a number of sellers out there being forced to liquidate assets and loan portfolios at attractive prices," Evan Gentry, head of G8 Capital, said Thursday.

Formed last year with money from private investors, Ladera Ranch-based G8 has bought about $50 million of mortgages from home-loan companies, banks and securities firms, typically for 20% to 50% less than what borrowers owe, he said.

Kurland, 55, is PennyMac's chairman and chief executive. He joined Countrywide in 1979 and before leaving was heir apparent to CEO Angelo Mozilo, Mozilo has said.

Kurland confirmed Thursday that PennyMac had been formed but declined to comment.

In an October 2006 interview, Mozilo dismissed speculation that his former deputy had left Countrywide a month earlier because Kurland thought the lender faced tough times. Kurland wanted the CEO post on terms the board couldn't accept, Mozilo said.

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