A new company has emerged to address some of the financial turmoil created by the credit crisis. Private National Mortgage Acceptance Company, LLC, known as a PennyMac, has just opened its doors.
PennyMac plans to buy at-risk loans from banks and savings and loans - at a deep discount. They will then attempt to work with the borrower to restructure the loan so that the borrower can make the payments and stay in the home. Once the loan is stable, PennyMac will then sell the loan to other investors at a profit. As stated on PennyMac's website, they will acquire "loans from financial institutions seeking to reduce their mortgage exposures. PennyMac will create value for both borrowers and investors through our distinctive approach to loan servicing. "
These financial woes were caused, in part, by the greed of irresponsible corporations. Some, like Countrywide, one of the biggest players in the loan debacle, are being investigated by the FBI for securities fraud. So it's good to know that there are money wizards trying to solve this mess. But who are these financial "white knights"?
Let's start with PennyMac's founder, Chairman, and CEO, Standford L. Kurland. Here's a quotation from Mr. Kurland's biography as stated on the website:
He is well recognized for his leadership in developing the strategic direction, risk management activities, financial management, and organizational development of Countrywide Financial Corporation. During his tenure at Countrywide Financial, until his departure in 2006, where he served as Chief Financial Officer and then Chief Operating Officer and President, the company grew in market capitalization from just over one million dollars to a leading financial services firm with over 25 billion dollars in market value. Under his leadership, Countrywide built a world class organizational and governance structure.
Yes - you read that correctly. The man who was the head of one of the largest companies responsible for this financial mess is now going to head the company that will profit from trying to fix the mess. "He won't be the first or the last person trying to make money on both sides of a trade," said Frederick Cannon, an analyst at Keefe, Bruyette & Woods Inc., who covers Countrywide.
You sure are correct, Mr. Cannon. Kurland isn't the only former Countrywide manager planning to use PennyMac to drain even more personal profit out of this loan crisis. Here are a few other former Countrywide employees and their new PennyMac titles:
David Spector, Chief Investment Officer;
Farzad Abolfathi, Chief Technology Officer;
Adal Bisharat, Director, Strategic Planning;
James S. Furash, Chief Development Officer;
Aratha M. Johnson, Chief Administrative Officer;
Michael L. Muir, Chief Capital Markets Officer
Lior Ofir, Director, Technology;
Mark P. Suter, Chief Portfolio Strategy Officer; and
David M. Walker, Chief Credit Officer.
If I murdered someone and wrote a book about it and that became a best seller, I would not be allowed to keep the money. The law says I can not profit from my crime. So why are these people allowed to perpetrate these financial crimes and, not only get away with it, but be allowed to profit from the fix?
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