SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 6101 Condor Drive

Moorpark, CA 93021

July 31, 2014

Ms. Kristi Marrone

 Staff Accountant

United States Securities and Exchange Commission

 100 F Street,
NE

 Washington, D.C. 20549

 SUBJECT:

 File No. 001-34416

 Response to
your comment letter

 PennyMac Mortgage Investment Trust

Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

 Dear Ms. Marrone:

 I am
writing in response to your letter dated July 17, 2014 regarding your review of the Annual Report on Form 10-K of PennyMac Mortgage Investment Trust (the “Company”) for the year ended December 31, 2013 as filed on
February 28, 2014.

 Following are our responses to your comments. For ease of review, we have reprinted your comments in bold face followed by our
responses.

 Form 10-K for the Fiscal Year Ended December 31, 2013 filed February 28, 2014

Liquidity and Capital Resources, page 87

1.
We note that you disclosed your leverage ratio in your 2013 Q4 earnings call. To the extent used by management, please disclose your leverage coverage ratio in future Exchange Act periodic filings.

 Ms. Kristi Marrone

July 31, 2014

 Page 2 of 5

 We will add our leverage ratio to future Exchange Act periodic filings as shown in bold text below:

As of December 31, 2013 and December 31, 2012, we financed our investments in mortgage backed securities, our inventory of mortgage loans acquired
for sale at fair value, mortgage loans at fair value, mortgage loans at fair value held by variable interest entity, and real estate acquired in settlement of loans under agreements to repurchase and forward purchase agreements as follows:

December 31, 2013

December 31, 2012

(dollars in thousands)

 Assets financed

$
3,447,587

$
1,944,973

 Total assets in classes of assets financed

$
3,787,478

$
2,253,233

 Borrowings

$
2,431,600

$
1,256,102

 Percentage of invested assets pledged

91
%

86
%

 Advance rate against pledged assets

71
%

65
%

 Leverage ratio (1)

1.83
x

1.05
x

(1)
All borrowings divided by shareholders’ equity at period end.

2.
We note your quantification of the average balance outstanding and maximum daily amount outstanding for repurchase agreements on an annualized basis here and in the notes to the financial statements. Please expand
your disclosure in future filings to quantify the average quarterly balance for each category of repurchase agreement for each of the past three years. In addition, quantify the period end balance for each of those quarters and the maximum balance
at any month-end. Explain the causes and business reasons for significant variances among these amounts.

 Beginning late in 2013,
certain of our repurchase agreements began providing financing eligibility across multiple types of collateral. Therefore, providing information regarding available borrowing capacity at period end became relevant only in total for each such
agreement. Further, we manage our repurchase borrowing levels by facility and contractual limitations across asset classes. As a result, beginning with the quarter ended March 31, 2014, we have provided our repurchase agreement disclosures
as a single item, “assets sold under agreements to repurchase” consistent with how we view and manage such borrowings.

 In the Liquidity and
Capital Resources section of future Annual Reports on Form 10-K, we will quantify the average quarterly balance for our asset repurchase agreements for each of the past three years, the period-end balance for each of those quarters, and the
maximum balance outstanding during each quarter. We will also explain the cause and business reason for material variances among these amounts.

 Ms. Kristi Marrone

July 31, 2014

 Page 3 of 5

 Consolidated Balance Sheets, page F-1

3.
We note that you separately present the assets and liabilities held by your consolidated variable interest entity on the balance sheet. In future filings, please recast your balance sheet to present the consolidated
totals for each line item required by Rule 5-02 of Regulation S-X. Please note that you may state parenthetically after each line item the amount that relates to consolidated VIEs, or you may include a table following the consolidated balance sheets
to present assets and liabilities of consolidated VIEs that have been included in the preceding balance sheet.

 Changes to our balance
sheet with respect to the presentation of VIEs will be as follows in future filings. New text is presented in bold face:

December 31,

2013

2012

(in thousands, except share data)

ASSETS

 Cash

$
27,411

$
33,756

 Short-term investments

92,398

39,017

 Mortgage-backed securities at fair value

197,401

—

 Mortgage loans acquired for sale at fair value (includes $454,210 and $947,522 pledged to secure mortgage loans acquired for sale under
agreements to repurchase)

458,137

975,184

 Mortgage loans at fair value (includes $2,479,739 and $956,583 pledged to secure mortgage loans sold under agreements to
repurchase)

2,600,317

1,189,971

 Mortgage loans under forward purchase agreements at fair value (includes $218,128 pledged to secure borrowings under forward purchase
agreements)

218,128

—

 Excess servicing spread purchased from PennyMac Financial Services, Inc.

138,723

—

 Derivative assets

7,976

23,706

 Real estate acquired in settlement of loans (includes $98,109 and $23,834 pledged to secure real estate acquired in settlement of loans
sold under agreements to repurchase)

138,942

88,078

 Real estate acquired in settlement of loans under forward purchase agreements, pledged to secure forward purchase agreements

9,138

—

 Mortgage servicing rights (includes $26,452 and $1,346 carried at fair value)

290,572

126,776

 Servicing advances

59,573

32,191

 Due from PennyMac Financial Services, Inc.

6,009

4,829

 Other assets

66,192

46,155

 Total assets

$
4,310,917

$
2,559,663

LIABILITIES

 Assets sold under agreements to repurchase

$
2,039,605

$
1,256,102

 Borrowings under forward purchase agreements

226,580

—

 Asset-backed secured financing at fair value

165,415

—

 Exchangeable senior notes

250,000

—

 Derivative liabilities

1,961

967

 Accounts payable and accrued liabilities

71,561

48,285

 Due to PennyMac Financial Services, Inc.

18,636

12,216

 Income taxes payable

59,935

36,316

 Liability for losses under representations and warranties

10,110

4,441

 Total liabilities

2,843,803

1,358,327

 Commitments and contingencies

SHAREHOLDERS’ EQUITY

 Common shares of beneficial interest—authorized, 500,000,000 common shares of $0.01 par value; issued and outstanding, 70,458,082
and 58,904,456 common shares, respectively

705

589

 Ms. Kristi Marrone

July 31, 2014

 Page 4 of 5

December 31,

2013

2012

(in thousands, except share data)

 Additional paid-in capital

1,384,468

1,129,858

 Retained earnings

81,941

70,889

 Total shareholders’ equity

1,467,114

1,201,336

 Total liabilities and shareholders’ equity

$
4,310,917

$
2,559,663

 Assets and liabilities of consolidated variable interest entities included in total assets above

 Assets

 Mortgage loans at fair value (includes $516,473 sold under agreement to repurchase and financed under asset-backed secured financing
at fair value)

$
523,652

$
—

 Other assets – interest receivable

1,584

—

$
525,236

$
—

 Liabilities

 Asset-backed secured financing at fair value

$
165,415

$
—

 Accounts payable and accrued expenses – interest payable

497

—

$
165,912

$
—

 Consolidated Statements of Income, page F-2

4.
To the extent that Other expenses remains material to the income statement, please consider disaggregating its components on the face of the statement or in a note to the financial statements.

We will add a note to our financial statements summarizing the significant components of Other expenses in future filings as shown below:

Note 34—Other Expenses

 Other expenses is summarized
below:

Year ended December 31,

2013

2012

2011

(in thousands)

 Common overhead allocation from PFSI

$
10,423

$
4,189

$
3,981

 Loan origination

4,584

752

71

 Servicing and collection costs

1,861

1,572

2,160

 Securitization expenses

1,743

—

—

 Insurance

889

762

722

 Technology

825

701

581

 Other

2,736

1,581

372

$
23,061

$
9,557

$
7,887

 Ms. Kristi Marrone

July 31, 2014

 Page 5 of 5

 You may call me at (818) 224-7434 if you require clarification or have additional questions. I can also be
reached by U.S. mail or by e-mail at anne.mccallion@pnmac.com.

Sincerely,

 /s/ Anne D. McCallion

Anne D. McCallion

Chief Financial Officer