Moorpark-based PennyMac Enters $550 Million Mortgage Agreement with Bank of America
PennyMac Mortgage Investment Trust, a real estate investment trust based in the city of Moorpark, have entered into an agreement with Bank of America to fund approximately $550 million in new mortgages. A real estate investment trust is a type of company, usually with many investors, that typically owns and operates a portfolio of income-producing real properties. Types of properties can include apartments, shopping centers, offices, hotels, and industrial warehouses.
As a REIT, PennyMac’s investment preference is distressed residential mortgages along with other mortgage-related assets. The company is also involved with correspondent lending, loan origination, and loan packaging alongside banks. The deal with Bank of America stipulates that the loans’ values are guaranteed until January 30, 2015. The agreement places a requirement on PennyMac – the company must transfer cash or any additional mortgage loans to compensate for any declining conditions that affect the market value or the purchased mortgage loans.
PennyMac has the option to repurchase any loans back from BofA. If the REIT pursues this course of action, they must pay the principal balance in addition to any interest accrued, a commitment fee, and additional administrative costs and expenses. PennyMac Mortgage Investment Trust is a sister company of PennyMac Financial Services, a U.S. residential mortgages firm.