I’m not sure how to feel about this exactly, to tell you the truth…I mean a lot of people here in Salem Oregon are facing losing their homes due to foreclosure. So you’d think I’d be all happy about a program that can help them get refinanced and stay in their homes…
On NYTimes.com, they had an article about PennyMac. Fannie Mae, Freddie Mac, Sallie Mae…now PennyMac.
PennyMac is the Private National Mortgage Acceptance Company. They purchase bad loans from the FDIC for pennies on the dollar. They foreclose on some and modify as many as they can. In fact, one couple took their 7.25% loan to a 3% loan which helped to save them from foreclosure. Sounds like a good thing? Yes it is…
In fact, business is very good at PennyMac. They purchased $560 Million in loans from the FDIC for $43.2, which is for 38 cents on the dollar. Even with low refinancing options, they stand to make a LOT of money.
What’s my problem, you say…well…the irony for one.
PennyMac is run by the former executives of Countrywide. Countrywide was one of the worst offenders for lending standards, helping to create an insane mess. So after creating a mortgage mess, the former execs get to help clean it up and make oodles of money in the process.
The NYTimes quoted Margot Saunders, a lawyer with the National Consumer Law Center as stating… “It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it.”
Her analogy pretty much summed up my thoughts upon reading the article. Make no mistake…a business entity like PennyMac is sorely needed, but dang…Countrywide Execs?? Could we at least have had a company not associated with such poor ethics make a profit on this one? Is that too much to ask?
If you have a loan held by PennyMac, they can negotiate great terms for you. Don’t ignore their phone calls, or you can visit the PennyMac website for refinancing information.
Karma missed the boat on this one…