Ex-Countrywide execs' new firm raises eyebrows

"It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it." That's what one critic of PennyMac--the firm formed by former Countrywide officials to buy up distressed mortgages--said to the New York Times. Dismissing the critics, PennyMac executives tell the newspaper that "PennyMac's operations serve as a model for how the government, working with banks, can help stabilize the housing market and lead the nation out of the recession."

Of course, they regret what happened to the company formerly known as Countrywide, which has become synonymous with excess. But, for PennyMac business is good. There are plenty of delinquent mortgages at failed banks that the government is happy to sell, often at pennies on the dollar.

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