PennyMac Mortgage Investment Trust earned $53 million in 1Q13, compared with $49 million in 4Q12 and
He elaborated that PennyMac’s portfolio of distressed loans had valuation gains because of rising home prices, but gains on mortgage loans acquired for sale decreased.
PennyMac recorded a $64 million gain on its investment portfolio, up 68% over 4Q12. It purchased $366 million in distressed mortgages during 1Q13.
“Investment returns were solid for the quarter, particularly in distressed whole loans where we saw increased gains from valuation and strong liquidation activity,” said Kurland. “Home prices have continued to stabilize, with many of the previously hardest hit areas showing appreciating home prices. Many loans in our portfolio are located in these areas, which contributed to the valuation gains.
“Another contributing factor has been the increase in investor demand for reperforming loans over the past several months. While correspondent originations were down, PennyMac’s investments in mortgage servicing rights continued to grow, and we continue to view this asset as a very attractive opportunity.”
PennyMac purchased $8.5 billion of mortgages through the correspondent channel during the quarter, down from $10 billion in 4Q12. By type, conventional loans were nearly $4.8 billion and FHA $3.7 billion, with a nominal amount of jumbo loans (a very scant $8.1 million) in the mix.
It now services $16.6 billion, up from $12.2 billion as of Dec. 31, 2012. PennyMac had servicing fee revenue of $11.1 billion and a $2.5 billion gain in fair value, but amortization of MSRs of $5 billion and a hedging loss of $2 billion ate into that.
