NEW YORK, March 24: A group of US financial market and mortgage industry veterans said on Monday they had formed a new investment company to buy up distressed mortgage loans.

The investment vehicle, Private National Mortgage Acceptance Company, LLC (PennyMac), is backed by BlackRock, Inc., a New York-headquartered investment management firm, and Highfields Capital Management, a Boston-based hedge fund.

The firms said that PennyMac plans to buy up troubled mortgage loans and seek to service the home loans more effectively so that they become profitable.

PennyMac also hopes to enable cash-stretched borrowers to avoid foreclosure on their properties.

“PennyMac’s strategy is to avoid foreclosures, and instead restructure the loans of struggling borrowers so they can stay in their homes,” said PennyMac’s chairman Stanford Kurland.—AFP