Stan Kurland was once president of Countrywide Financial (he left in 2006), but now he runs PennyMac Mortgage Investment Trust, which is in the business of buying distressed loans on the cheap, modifying them to keep the borrowers in their homes, and then collecting a return on the debt. This week, he's taking PennyMac public, looking to raise $400 million. From the LAT:

The prospectus for the stock offering says the Calabasas-based fund expects to "provide attractive risk-adjusted returns to our investors over the long-term, primarily through dividends and secondarily through capital appreciation." In the roadshow for the offering the firm says it believes its business model is capable of generating 18% to 25% annualized returns on mortgage portfolios, before management fees.

PennyMac got going last year with the help of bond fund BlackRock and private equity firm Highfields Capital Management. Kurland's company now owns and/or services loans totaling about $800 million and soon expected to grow to $2.8 billion.

In the prospectus for the offering and the roadshow presentation, PennyMac stresses that its process evaluates distressed loans one by one to decide on a solution -- either a modification, foreclosure or resale of the loan. That custom approach, the firm says, is what sets it apart from many lenders struggling just to deal with the avalanche of troubled borrowers and unused to being creative with modifications.