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NEW YORK CITY-Locally based BlackRock Inc. and Boston-based Highfields Capital Management have sponsored a new company that will acquire and restructure distressed residential mortgage loans in response to the ongoing dislocation in the US mortgage market. The new company, Calabasas, CA-based Private National Mortgage Acceptance Co. LLC or PennyMac, has been formed by BlackRock, Highfields, and a management team of mortgage industry veterans led by Stanford L. Kurland, PennyMac’s chairman and CEO.

PennyMac will raise capital from private investors, acquire loans from financial institutions seeking to reduce their mortgage exposures, and seek to create value for both borrowers and investors through distinctive loan servicing. Kurland was president and COO of Countrywide Financial Corp. until his departure in October 2006. The PennyMac management team also includes David Spector, CIO, who is former co-head of global residential mortgages for Morgan Stanley.

“We are pleased to sponsor PennyMac, a company that seeks to bring patient capital to the unprecedented distress in residential mortgages,” says Laurence Fink, BlackRock chairman and CEO. “Stan Kurland and his team have enormous talent and experience in the mortgage business, making them well equipped to develop effective solutions for sellers of mortgage assets and homeowners alike.”

Jonathon Jacobson, Highfields co-founder and senior managing director, says that “there has been intense market focus on write-downs of mortgage-related securities, but whole loan losses have barely begun to materialize. Over the next two to three years, we anticipate that the volume of bank-held non-performing mortgages will grow dramatically. PennyMac will be extraordinarily well positioned as both a buyer and servicer of these assets.”

Kurland notes that “our intent is to combine fresh capital with deep mortgage portfolio management and servicing expertise. … PennyMac’s strategy is to avoid foreclosures, and instead restructure the loans of struggling borrowers so they can continue paying and stay in their homes. As a specialty servicer without the burden of a legacy portfolio or business practices, we have the flexibility to offer individual borrowers unique solutions to address their needs.”

PennyMac’s loan servicing activities will be managed through a proprietary servicing operation based in southern California. PennyMac will also utilize BlackRock’s capital markets and mortgage expertise, including risk management analytics. PennyMac did not return GlobeSt.com queries before deadline.

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