We should have expected something like this. It is the American way! Entrepreneurialism! Innovation!Chutzpah! The ability to see magnificent castles where other see only a pile of rocks. Or, if we want to be cynical, we could say that here is an example of someone taking advantage of the misfortune of others and making plans to benefit from their misfortune. Here is a link to an article written by Ryan Nakashima, for the Associated Press, thatI saw posted on Yahoo! News and other sites. It seems that the guy who was the former president of Countrywide Financial, formerly the largest U. S. mortgage lender, which has fallen on hard times and has been taken over by Bank of America, is now starting a new company. That company will buy up loans of borrowers who are having problems, help them to restructure their loans to avoid foreclosure and when the new loans are on a sound financial basis, sell the loans as investments. Kurland has a long term view of the vitality of the mortgage market. While he hopes to turn some of the acquired loans around fairly quickly, he is quoted as saying, “Other properties that may take longer, we’re prepared to hold five to seven years.”

So why am I writing about this new company? Well…two reasons…

The first reason: the name. The new company is called Private National Mortgage Acceptance Co. LLC or - and this is the part I love  - PennyMac! It has that homey feeling. “A penny saved is a penny earned”. Or, in this case, a mortgage saved may earn PennyMac lots of dollers. Not to be confused with the government sponsored companies, Freddie Mac, Fanny Mae, Sally Mae, PennMac is a privately owned and capitalized company.

The second thing is the lesson that we can all learn. These guys are not waiting for the market to “hit bottom before they buy”. They are willing to hold assets for as long as it may take for the assets to perform. Stanford Kurland has been in the real estate business for 30 years or so. Much of the brain trust that is starting this company came for Countrywide. Sure, his company got caught up in the excesses of liberal lending that is now causing major real estate problems. But, he understands that real estate is not in a downward slide with no end in sight. He understands that real estate is still a sound investment. He understands that it is smart to buy now and not wait.

In the areas in which I work…Fremont, Newark, Pleasanton, Livermore, Union City, Hayward…there are plenty of opportunities. Some areas have seen substantial price erosion; some have seen very little.

Follow the smart money. The smart money is buying. Not just anything, but good value. There is plenty of good opportunities out there.