NYT does PennyMac

The Calabasas-based firm that buys up delinquent home mortgages, sometimes for pennies on the dollar, was started by Stanford Kurland, the former president of Countrywide Financial - and apparently it's growing like gangbusters. From the Times:

“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Mr. Kurland one morning last week in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished. “In fact, it’s off-the-charts good,” he told Mr. Kurland, who was leaning back comfortably in his white leather boardroom chair, even as the financial markets in New York were plunging.

Kurland believes that PennyMac serves as a model for how the federal government can help stabilize the housing market. But he has been a controversial figure.

“It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said Margo Saunders, a lawyer with the National Consumer Law Center, which for more than a decade has sought to place limits on abusive lending practices. More than any other major lending institution, Countrywide has become synonymous with the excesses that led to the housing bubble. The once-highflying firm’s reputation has been so tarnished that Bank of America, which bought it last year at a bargain price, announced that Countrywide’s name and logo, which had once proudly announced the biggest mortgage lender in the United States, would soon disappear forever.

[CUT]

In retrospect, Mr. Kurland said, he regrets what happened at Countrywide and in the mortgage industry nationwide, but does not believe he deserves blame. “It is horrible what transpired in the industry,” said Mr. Kurland, who has never been subject to any regulatory actions. But lawsuits against Countrywide raise questions about Mr. Kurland’s portrayal of his role. They accuse him of being at the center of a culture shift at Countrywide that started in 2003, as the company popularized a type of loan that often came with low “teaser” interest rates and that, for some, became unaffordable when the low rate expired. The lawsuits, including one filed by New York State’s Comptroller, say Mr. Kurland was well aware of the risks, and even misled Countrywide’s investors about the precariousness of the company’s portfolio, which grew to $463 billion in loans, from $62 billion, during the final six years of his tenure.

My December piece in Los Angeles magazine notes that at the time of Kurland's resignation from Countrywide in 2006, his compensation was $42.5 million. That included a $25.4 million termination payout and $15.2 million in option awards. “I try to remind people that I had a 27-year career at what was a very good mortgage company," he told me last fall.