PennyMac Posts 1Q Profit, Provides Guidance on Conduit

Mortgage vulture fund PennyMac Mortgage Investment Trust earned $1.3 million in the first quarter and reported that it's beginning to see more activity in the nonperforming loan market. A publicly traded REIT, the firm said it bought five mostly nonperforming loan portfolios during the quarter. The pools were valued at $115 million based on unpaid principal balances of $208 million. The firm said in early April it agreed to purchase a $141 million pool of nonperformers for $71 million. Company CEO Stan Kurland said, "Market activity for non-performing whole loans accelerated throughout the first quarter, and continues to accelerate into the second quarter of 2010." Meanwhile, the company said it is beginning to gear up its lending conduit by purchasing loans from small and mid-sized banks. The product is then delivered to Fannie Mae and Freddie Mac for securitization. A spokesman noted that, "We're looking at prime agency paper" but added that jumbo lending will be a "natural progression" for the firm.