PennyMac Mortgage Investment Trust (NYSE: PMT) today announced that it, through one of its wholly-owned subsidiaries, has been approved to produce and service small balance multifamily loans under Freddie Mac’s Small Balance Loan (SBL) program. This program offers a broad array of mortgage finance solutions for the purchase and refinancing of smaller multifamily properties with the advantage of streamlined processes for pricing, underwriting and loan closing.
“The approval of PMT for Freddie Mac’s SBL program marks a major milestone in the development of our commercial mortgage business and highlights the depth and experience of our team,” said Chairman and Chief Executive Officer Stanford L. Kurland. “Freddie Mac has been an important business partner of PMT for many years, and the SBL seller / servicer approval enhances our already strong relationship.”
Freddie Mac SBLs are defined as loans of $1 million to $5 million for multifamily properties with five units or more, with fixed and adjustable rate product offerings. The broad array of small balance financing options provided by the SBL program complements PMT’s existing product offerings, expanding its capabilities to meet customer’s financing needs and bolstering the development of new relationships in the future. “PMT was selected for its expertise in commercial real estate, especially in the smaller loan market,” said David Brickman, Executive Vice President of Freddie Mac Multifamily. “We look forward to working with PMT to meet the financing needs of small apartment property owners.”
The securitization of SBLs is similar to that of a standard Freddie Mac securitization structure, the K-deal, in which Freddie Mac sells the first loss “B-piece” risk in the securitization to private investors. Unlike the K-deal execution, PMT plans to retain the B-pieces secured by its underlying loans as an investment.
“The SBL program is an important addition to our existing commercial loan product offerings and we expect to become a significant participant in the program as we continue to build a nationwide commercial mortgage presence,” stated Vandad Fartaj, PMT’s Chief Investment Officer. “The Freddie Mac SBL program also aligns very well with our strategy of investing in the credit risk from PMT’s own mortgage production.”
About PennyMac Mortgage Investment Trust
PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. PennyMac Mortgage Investment Trust trades on the New York Stock Exchange under the symbol “PMT” and is externally managed by PNMAC Capital Management, LLC, an indirect subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI). Additional information about PennyMac Mortgage Investment Trust is available at www.PennyMac-REIT.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: changes in our investment objectives or investment or operational strategies, including any new lines of business or new products and services that may subject us to additional risks; volatility in our industry, the debt or equity markets, the general economy or the real estate finance and real estate markets specifically; events or circumstances which undermine confidence in the financial markets or otherwise have a broad impact on financial markets; changes in general business, economic, market, employment and political conditions, or in consumer confidence and spending habits from those expected; declines in real estate or significant changes in U.S. housing prices or activity in the U.S. housing market; the availability of, and level of competition for, attractive risk-adjusted investment opportunities in mortgage loans and mortgage-related assets that satisfy our investment objectives; the inherent difficulty in winning bids to acquire distressed loans or correspondent loans, and our success in doing so; the concentration of credit risks to which we are exposed; the degree and nature of our competition; the availability, terms and deployment of short-term and long-term capital; the adequacy of our cash reserves and working capital; our ability to maintain the desired relationship between our financing and the interest rates and maturities of our assets; the timing and amount of cash flows, if any, from our investments; unanticipated increases or volatility in financing and other costs, including a rise in interest rates; the performance, financial condition and liquidity of borrowers; incomplete or inaccurate information or documentation provided by customers or counterparties, or adverse changes in the financial condition of our customers and counterparties; changes in the number of investor repurchases or indemnifications and our ability to obtain indemnification or demand repurchase from our correspondent sellers; increased rates of delinquency, default and/or decreased recovery rates on our investments; increased prepayments of the mortgages and other loans underlying our mortgage-backed securities or relating to our mortgage servicing rights, excess servicing spread and other investments; the degree to which our hedging strategies may or may not protect us from interest rate volatility; the effect of the accuracy of or changes in the estimates we make about uncertainties, contingencies and asset and liability valuations when measuring and reporting upon our financial condition and results of operations; changes in regulations or the occurrence of other events that impact the business, operation or prospects of government sponsored enterprises; changes in government support of homeownership; changes in governmental regulations, accounting treatment, tax rates and similar matters; our ability to satisfy complex rules in order to qualify as a REIT for U.S. federal income tax purposes; and our ability to make distributions to our shareholders in the future. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160120005477/en/
Contacts:
PennyMac Mortgage Investment Trust
Christopher
Oltmann, 818-224-7028
