Investment funds affiliated with PennyMac — a "scratch and dent" firm headed by a former top executive at Countrywide Financial Corp. — have purchased a $558 million portfolio of 2,800 residential loans from the government using a cashflow sharing arrangement.

Initially, the Federal Deposit Insurance Corp. (FDIC) will receive 80% of the cashflow on the mortgage portfolio with the balance going to the investor group.

A spokesman said eventually the FDIC will receive 60% of the cashflow. "Once it hits a certain threshold it adjusts downward," said the spokesman.

He declined to say what that threshold is. The portfolio consists of outstanding first and second liens scattered throughout the U.S. with the heaviest concentration in Arizona, California, Florida, and New York. PennyMac's servicing division will service and work out the loans, the company said in a statement. Investment funds managed by a PennyMac affiliate called PNMAC Capital Management  bought the loans from the FDIC, paying cash for them. The portfolio belonged to First National Bank of Reno, which failed this summer.

PennyMac is headed by Stanford Kurland, who was forced out of Countrywide in 2006 in a power struggle with then chairman and CEO Angelo Mozilo. (On July 1 CFC was sold to Bank of America.)

At one time, Kurland was considered to be Mozilo's successor at the company. PennyMac was formed by Kurland last year with financial backing from BlackRock and other investors.

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