Secondary

PennyMac Mortgage Investment Trust has entered into a repurchase agreement with Bank of America to finance roughly $550 million in newly originated mortgage loans, though its subsidiary PennyMac Operating Partnership.

Mortgage-bond buyers, facing a supply shortage as their market shrinks and trading slows, get a chance tomorrow to bid for securities at the largest auction of its type since at least 2010.

The Federal Home Loan Bank of Chicago is launching a pilot program soon to buy home loans and issue Ginnie Mae securities. The program could allow community banks and credit unions to stay in the mortgage business.

“Under the terms of this settlement, the bank has admitted to its misdeeds in great detail,” U.S. Attorney General Eric Holder said.

Bank of America Merrill Lynch priced an offering of bonds backed by the mortgage on the Intercontinental New York Times Square.

Radian Group and MGIC Investment Corp. are among mortgage insurers that would need to fill a financial gap under new financial-strength rules proposed by the Federal Housing Finance Agency.

Insurers would have two years to meet the tougher liquidity standards.

Reps. John Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., introduced a new housing bill Thursday designed to provide an explicit government backstop for the market but still increase private sector participation.

Fortress Investment Group hired Adam Siegel, a former trader at Royal Bank of Scotland Group, to expand its mortgage business.

Citigroup may reach an agreement with federal prosecutors as early as next week to resolve a probe into sales of mortgage-backed bonds before the 2008 financial crisis.