PennyMac, a firm founded by Stanford Kurland and backed by BlackRock and Highfields Capital, bought $558m of home loans from the FDIC. PennyMac was formed by Kurland after he left Countrywide to do exactly this—take bad loans off of the books of other institutions and do it at a deep discount. According to Bloomberg:
…The firm is paying an average of 30 cents to 50 cents on the dollar for the loans and the FDIC is sharing some of the risk, spokesman Andrew Chang said.
…PennyMac’s purchase is the second FDIC sale of bank assets to private buyers announced this year. Regulators are seeking to dispose of assets after at least 25 lenders collapsed last year. With banks concentrating on rebuilding capital, the FDIC has been offering loans to private buyers, and last week sold the remains of IndyMac Bank to a group led by former Goldman Sachs Group Inc. executive Steven Mnuchin.
“This asset sale did not provide any loss-sharing,” said FDIC spokesman David Barr in an interview about the PennyMac deal. “It is a participation sale, however, which means the FDIC benefits from cash-flow generated from these loans.”
The FDIC will receive 80 percent of the loan’s cash flow until a certain, undisclosed level of payments are received, then 60 percent thereafter, he said.