PennyMac Mortgage Investment Trust (PMT) and Credit Suisse First Boston (CS) entered into repurchase agreements that allow the former to sell, and later repurchase, newly originated loans to the latter.
One of the agreements with subsidiary PennyMac, or PMC, funds newly originated mortgages purchased by PMC from correspondent lenders and held for sale or securitization.
The agreement with PennyMac Mortgage Investment Trust Holdings, or PMITH, another subsidiary, funds newly originated mortgages purchased by PMC from correspondent lenders and pledged by PMC to PMITH.
The principal amount paid by Credit Suisse for each mortgage under the repurchase agreements is based on a percentage of the lesser of the market value or the unpaid principal balance of the mortgage. Upon repurchase, PMC or PMITH is required to repay Credit Suisee the principal amount related to the mortgage plus accrued interest to the date of the repurchase.
PennyMac Mortgage Investment Trust is expanding its presence in the world of distressed loans. It recently agreed to acquire a nonperforming whole loan pool totaling $452 million in unpaid principal balance.
The agreement follows a second quarter in which PennyMac bought $402 million in UPB of both nonperforming ($224 million) and reperforming loans ($178 million).