Former Countrywide Execs Buying Up Bad Mortgages

Many have argued that Countrywide Financial and its top executives carry a large portion of the blame for the current state of the housing market and the vast amounts of bad loans that have now infiltrated the nation's financial system. The Countrywide name, and those associated with it, have been irreversibly tarnished by their role in the subprime crisis - the ripple that sparked the foreclosure and housing tsunami.
Even so, about a dozen or so former leaders of the Countrywide giant have formed a new California-based company, ""Private National Mortgage Acceptance Company, LLC"":http://www.pnmac.com/ (PennyMac), which specializes in acquiring and managing toxic mortgage assets on behalf of private investors.
According to a _""New York Times"":http://www.nytimes.com_ report, Stanford L. Kurland, Countrywide’s former president, and his team at PennyMac have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. The _Times _said that Kurland has raised hundreds of millions of dollars from big players like investment manager ""BlackRock"":http://www.blackrock.com/ to finance the start-up, along with putting up some of his own cash from the $200 million in stock that he sold before leaving Countrywide.
While some critics have expressed concern that Kurland and other Countrywide execs are back in the mortgage business, PennyMac’s chiefs say the company's operations should serve as a model for how the government, working in partnership with banks, can help stabilize the ailing housing market and pull the nation from the throes of recession. Kurland told the _Times_, ""It is very important to the entire team here to be part of a solution.""
Homeowners who have benefited from PennyMac's business say the company is, in fact, helping many distressed homeowners. Robert Robinson, of Felton, Pennsylvania, whose interest rate was cut by more than half to make his mortgage more affordable, told the _Times_, ""Literally, their assistance saved my family’s home.""
Earlier this year, PennyMac announced that it had purchased $558 million in residential mortgage loans from the FDIC as receiver for First National Bank of Nevada, which was shut down in July of last year. The transaction was the first structured sale of a non-construction residential mortgage loan portfolio made by the FDIC.