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PennyMac - Free Market cleaning govt diapers

Posted by dave_donhoff (dwdonhoff@hotmail.com) on
Tue, Mar 3, 09 at 20:09

PennyMac - Free Market cleaning govt diapers

Former Countrywide Leaders Start Firm to Buy Bad Loans

<_SNIP_>
PennyMac makes its money by buying loans from struggling or failed financial institutions at such a huge discount that it stands to profit enormously, even if it offers to slash interest rates or make other loan modifications to entice borrowers into resuming payments.

Its biggest deal has been with the Federal Deposit Insurance Corporation, which it paid $43.2 million, or the equivalent of 38 cents on the dollar, for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada. Many of these loans resemble the kind that Countrywide once offered, with interest rates that can suddenly balloon.
<_/SNIP_>

SERIOUSLY... I think this company (and potential competitors) ought to be given "tax free status" for a minimum period of "hussle time" (let's say 24-60 months) so they can get as much momentum in soaking up the muck. Granting them tax-free status (not taking away money from people is a "tax cost" in some people's minds who think everything belongs to the tax-collector anyway) will be an exponentially better "bang for the buck" than trying to ACTUALLY spending REAL taxpayers dollars pulled out of real pockets, and then MIS-managed by bureaucrats who've never actually earned their way into business.

We'll see how it goes!

Dave Donhoff
Leverage Planner


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