PennyMac Mortgage Investment Trust only sold $170 million out of $550.5 million of RMBS bonds structured under its private-label securitization that was completed in the third quarter.

The securitization, PMT Loan Trust 2013-J1  was backed by collateral that was a combination of $393 million in unpaid principal balance of jumbo loans acquired in a bulk purchase transaction earlier in the third quarter and jumbo loans acquired through PMT’s correspondent business throughout the year, the company said during its 3Q 2013 earnings call on Wednesday.

“The subordinate and [Interest Only] securities are attractive long-term investments for PMT which provide spread income over time and also act as an economic hedge to other assets in PMT’s investment portfolio,” said David Spector, PMT’s President and Chief Operating Officer. He said that the retention of the senior securities was viewed as an “opportunistic investment.”

The mortgage pool backing PMT 2013-J1 is comprised of 691 first-lien mortgage loans with an aggregate principal balance of $550,462,190.54 as of the cut-off date. The loans in the pool are all 30-year fully amortizing fixed-rate mortgages.  

PMT’s chairman and Chief Executive Officer, Stanford Kurland said on the call that the jumbo private label securitization market remains an opportunity that has tremendous promise over the long-term. However over the short-term, Kurland said that the GSE will remain large players in the high balance loan market and any meaningful reduction in conforming loan limits are not likely to occur until late 2014.

“The high level of government involvement makes it difficult for the non-agency market to grow and attract the necessary investor participation required for a healthy market,” said Kurland.

As a result PMT said it “will probably not issue another jumbo securitization until 2014.”

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