PennyMac Mortgage Investment Trust recently entered into a master repurchase agreement with Bank of America that allows a subsidiary of the publicly traded REIT to sell — and later repurchase — new originations in an aggregate principal amount of up to $200 million.
Of that $200 million, $100 million is committed to a loan repo facility that will be used to fund newly originated mortgages purchased from correspondent lenders, according to an Securities and Exchange Commission statement filed Monday afternoon.
The REIT said the loans will be held for sale and/or securitization. Part of the company's long-term strategy is to position itself as a mortgage aggregator and securitizer.
PennyMac, in its third quarter earnings report, highlighted an acceleration in its correspondent purchases. The company also continues to buy distressed mortgage-related assets in the secondary market.
“Our correspondent volume has experienced tremendous growth,” Stan Kurland, the company's chairman and CEO, said during the company's earnings call.
PennyMac added 21 correspondent sellers in the third quarter, bringing to 76 the number of originators it buys loans from. During the call Kurland estimated that the firm will be originating $1 billion per month by the end of next year.
BofA is currently in the process of shutting down its correspondent channel. Earlier this year several top BofA correspondent managers left the bank to join PennyMac.
The REIT also has repo agreements with Credit Suisse and Citigroup, but these are mostly used for financing the purchase of distressed mortgage assets.