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PennyMac Enters into Repurchase Facility with Bank of America

housingwire.com | July 15, 2014

PennyMac (PMT) is entering into a loan repo facility with Bank of America (BAC) to help fund newly originated mortgages.

The $550 million facility sells the mortgages to BofA, for PennyMac to potentially later repurchase, in a deal fully guaranteed by PennyMac.

PennyMac purchased the loans from correspondent lenders and were pledged for sale and/or securitization, according to documents filed with the SEC.

The principal amount paid by Bank of America for each eligible mortgage loan is based upon a percentage of the lesser of the market value, unpaid principal balance, purchase price or takeout price of such mortgage loan, the document states.

When PennyMac repurchases the mortgages it is required to repay BofA the principal plus accrued interest, as well as a “commitment fee,” and other servicing costs.

In the event market conditions deteriorate the loans’ value substantially, BofA will require PennyMac to transfer cash or additional eligible mortgage loans to cover the losses.

As a result, there are certain capital covenants PennyMac will need to maintain, the details of which may be found in the SEC filing.

 

Back to July 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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