Countrywide II Off to the Races
NEW YORK ( TheStreet) -- Countrywide Financial may have made more subprime housing loans than any other institution before the housing bubble burst, but that certainly didn't scare away investors from the public market debut of Countrywide II, formally known as PennyMac Financial Services
PennyMac, the parent of mortgage REIT PennyMac Mortgage Investment Trust
As investors look for ways to buy up what's left of the cheap housing that remains from the disaster, having Countrywide on one's resume may be more of an asset than a curse. Certainly these folks know where the bodies are buried, so who better to know where the most valuable tombs are so that they can now be plundered?
That seems to have been the thinking of investors, anyway, who bid up shares of PennyMac more than 6% on its first trading day Thursday, and had added another 5% as of 12:19 p.m. on Friday. BlackRock
PennyMac's business includes both servicing and originating mortgages, an area that has been hugely popular of late, with stocks like Ocwen Financial
Specialty servicers such as PennyMac, Ocwen, Nationstar and Walter are essentially debt collectors. Lots of new business has come their way as big banks like Bank of America
But are they really backing away from it, or are they just finding a different way to get involved? Bank of America was a co-underwriter of PennyMac's IPO and is a lender to the company. Another big bank, PNC Financial Services Group
Here's another gem from the "other risks" section of the prospectus: "Certain of our officers, including Stanford L. Kurland, our chairman and chief executive officer, are former employees of Countrywide Financial Corporation, which has been the subject of various investigations and lawsuits and ongoing negative publicity. We cannot assure you that any existing or future investigations, litigation or negative publicity involving Countrywide Financial Corporation will not generate negative publicity or media attention for us or adversely impact us."