This will help small and midsize lenders to compete more effectively with the large banks and drive more the total origination market to these lenders. These factors have created significant opportunity for non-bank financial intermediaries such as PMT to fill the resulting void and we think there is still considerable amount of growth potential for non-bank financial intermediaries in this channel. The current low mortgage rate environment coupled with the challenges that banks are facing with their mortgage related exposure have helped to increase the attractiveness of investments in mortgage servicing rights, Newly originated MSRs have relatively low prepayment risks given the historically low interest rate environment which enhances their return profile. Also regularity complexities and Basel III capital considerations will likely drive many large bank services to sell legacy MSRs.We anticipate that opportunities to acquire bulk servicing rights will remain for the foreseeable future. Against this backdrop to turn to slide four, PMT is a unique enterprise that is focused on investing in the U.S. residential mortgage market; it engages opportunistic investments while capitalizing on emerging opportunities of the market converges towards normalization. PMT is an externally managed REIT leveraging the capabilities of PNMAC Capital Management, PCM and its affiliate PennyMac Loan Services, PLS.
PennyMac Mortgage Investment Trust CEO At Barclays Capital Global Financial Services Conference (Transcript)
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