PennyMac Financial Services Inc. is setting up its new mortgage broker channel to target home-buyer and higher-balance loan segments, and eventually become one of the dominant players in the space.
"We spent considerable time evaluating this channel and believe it is the right time for us to participate," said Doug Jones, president of PennyMac Loan Services, in a press release. PennyMac Loan Services is an indirectly controlled subsidiary of PFSI.
"Our new broker channel will provide opportunities to grow volumes in attractive segments of the market, such as purchase-money and prime jumbo mortgages," Jones said. "We expect to leverage our leading market position to successfully grow our broker-direct platform and achieve a leadership position over time."
The company is working with brokers through a technology platform with pipeline management functions. Kimberly Nichols, managing director of direct lending channels and an executive with experience running the company's correspondent group, is leading the new build-out of the broker channel.
PennyMac has seen the share of purchase volume in its correspondent channel grow over time, fueled primarily by government-insured loans.
Back in 2013, purchases accounted for 59% of PennyMac's $31 billion in correspondent production. During the first three quarters of 2017, purchase loans made up 80% of the $48 billion in correspondent loans PennyMac produced, according to PFSI's third-quarter earnings presentation. Government product represented 62% of PennyMac's correspondent production in the third quarter.
Many lenders are heading into 2018 looking for ways to bolster their production volumes, particularly in the purchase market, where originations have increased as refinancing has declined.