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PennyMac moves warehouse, MSR line out of Credit Suisse

According to a Securities and Exchange Commission filing, PennyMac Financial Services is reducing risk exposure by moving three funding vehicles from Credit Suisse into two large firms. UBS, a local rival bank in Switzerland, is expected to purchase the bankrupt Swiss banking giant for $3.2 billion. This is as regulators in the U.S.A and abroad try to stem the tide of recent bank failures. “We have transferred all warehouse and MSR financing away from Credit Suisse and to Atlas as outlined in our recently filed 8k,” said a statement Tuesday attributed to the company, which referred to the filing.Representatives for PennyMac didn’t respond to a question about the facilities’ funding amounts and declined to provide further detail beyond the SEC filings. The other corporations involved didn’t respond either to comment requests or disclosures. Each funding facility has a maximum limit of $1 billion according to the repurchase agreement, which includes numerous amendments. The three notes with Credit Suisse, its Credit Suisse First Boston, and Alpine Securitization affiliates were issued originally between 2016 and 2021. However, Credit Suisse still had $20 billion in Ginnie Mae assets. Atlas Securitized Products purchased a substantial portion of Credit Suisse’s securitized product portfolio in 2021. NewFi, also known in SEC disclosures as Nexera Holdings, was an Emeryville-based consumer direct lender and wholesale lender. It was founded in 2014. PennyMac last week’s notice stated that it has no ties with failed depositories Silicon Valley Bank and Silvergate Bank and that its cash accounts and client funds are kept at undisclosed global bank. The lender based in Westlake Village, California, reported a $38million profit for the fourth quarter last year. It had weaker origination results, but higher servicing earnings. PennyMac was able to weather a difficult market decline in 2022, despite not being a major home loan originator in the U.S. housing sector. Credit Suisse provided warehouse and MSR facilities for Ginnie Mae MSRs as well as non-QM loans. Credit Suisse Securities also has a 10.9% market share of the small private-label residential mortgage backed bond market. However, Credit Suisse has provided warehouse and MSR facilities related to Ginnie Mae MSRs and non-QM loans. LoanDepot disclosed last week that its cash balances are safe and that Signature Bank has nine-figure lines credit. While mortgage rates have eased slightly, 10-year Treasury yields are still volatile. Lender executives have also expressed confidence that warehouse credit lines from bank partners will remain stable.