Rich Talks Real Estate

Stanford Kurland, President of PennyMac (Private National Mortgage Acceptance Corporation, LLC) is now involved in the purchase at .30-.50 cents on the dollar of troubled assets from the now defunct First National Banks of Nevada. On July 25, 2008 the First National Banks of Nevada were closed by the Office of the Comptroller of Currency with the FDIC named as receiver. Insured deposits, even those in excess of the $100,000 FDIC allowable amount, were acquired by the Mutual of Omaha Bank. This was good news for those with depository funds in excess of the insurable $100,000 because all insured deposits were protected.

It appears that PennyMac will now be stepping in to acquire some of the troubled mortgages that were held by the First National Banks of Nevada. The interesting thing is that these troubled mortgages were written prior to June 2008 and are a mixture of first and second mortgages, with both fixed and adjustable interest rates. While this is a good move for the FDIC in that it gives some amount of capital to them, it is a real boon for PennyMac who is able to acquire substantial securitized assets at a tremendous discount. For Kurland, who made tremendous sums in his role as president of Countrywide during the refinance boom, this represents yet another opportunity to make still more profits during the subsequent bust. PennyMac has been directed to try to assist as many delinquent homeowners as possible to remain in their homes, but is there any real incentive for them to do that? We have seen that doing the right thing is not near the same type of motivator as making money is for Kurland.