PennyMac’s mortgage playbook and how to scale over time

HousingWire

LIVE from Austin, Texas at The Gathering, this conversation with David Spector, Chairman and CEO of PennyMac, is all about timing, scale, and playing the long game in a consolidating mortgage market.   Spector walks through the company’s pivot from a purely organic growth mindset to a strategic acquisition of Cenlar—not as a change in philosophy, but as a response to reality. Building subservicing from scratch would’ve taken years. Buying scale? Immediate impact. The move accelerates PennyMac’s position in servicing while setting the stage for deeper investment in technology.   But this isn’t just an M&A story—it’s a culture story. Spector makes it clear: deals don’t fail because of numbers, they fail because of people. His approach flips the script—don’t force culture down, build alignment across. Integration, in his view, is about listening, not dictating.   Zoom out, and the bigger strategy comes into focus: convergence. Production and servicing are no longer separate lanes—they’re one ecosystem. That’s why PennyMac is physically consolidating teams (like in Dallas) and operationally aligning around recapture—owning the customer relationship from first loan to refinance.   And then there’s AI. Not hype—execution. Spector is pushing a decentralized model where business leaders own efficiency, supported by embedded AI talent. No “big bang” transformation—just constant iteration: build, deploy, refine. Over and over.   Through it all, the thesis is simple: in a market where margins are tight and capacity is high, efficiency wins. PennyMac isn’t betting on rates to save the business—they’re building a model that works no matter where rates go.   Related to the episode:   ⁠Diego Sanchez' LinkedIn  https://www.linkedin.com/in/diegoesanchez/  ⁠David Spector's LinkedIn  https://www.linkedin.com/in/david-spector-6404355/   The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire’s Zeb Lowe every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.

Transcript

00:10well live from austin texas at the gathering i'm diego sanchez president of housing wire

00:17and i have the real honor and pleasure of talking with david specter chairman and ceo of penny mac

00:24for our powerhouse podcast which used to be my podcast is now zeb's podcast but i guess toast

00:31every once in a while and i really love to do it especially with somebody that i've spoken with

00:35before uh david thank you so much for joining me today diego thank you for having me here today it's

00:39been a great day and i'm really enjoying myself so thank you yeah so we just got off stage i

00:44think

00:45we had a really lively conversation um and you know one of the things that we talked about was

00:50when i had you on powerhouse about a year ago you talked a lot about organic growth at penny mac

00:58and about not really being interested in m a because it might uh do something to the culture

01:04at penny mac which you're really passionate about uh and then you know five or six months later

01:09you acquire senlar um what happened between our conversation and that acquisition in terms of your

01:18strategic thinking about m a well so i think we're at a interesting point in our sector in the

01:26fact that there's a lot of consolidation taking place and we we are very committed to the organic build

01:34of our business and so that's why we set out to build a subservicing business but it became readily

01:42apparent to me that that the decision to change subservicers is one that's a very long sales cycle

01:50and to build a meaningful subservicing business was going to take years and so when i looked at the

01:59subservicing landscape i saw something really special and unique in senlar and you know i know

02:05i know the leaders of senlar i've i've i have a little bit of history with those leaders and i

02:12felt

02:12that this was an enterprise that obviously was the largest subservicer so it would give us you know

02:18immediate scale um and i felt that the scale wasn't was was important because as we as we'll be talking

02:26about our servicing technology later on here but the ability to get more scale in the servicing technology

02:32was a was a real driving factor for me um and i felt that you know when i looked at

02:39the you know

02:39the the the ability to acquire you know to be able to board that servicing that's a business we have

02:45a good long history with when we started the company we bought a lot of servicing packages in

02:52particular non-performing loan packages so we understand how to transfer servicing and so the

02:58ability to board those loans onto our system the ability to then deboard the loans when sellers want

03:04to when owners want to sell their servicing is something that that we have a history with and so

03:10it was a it was a business that i i feel very confident about and so you know it's not

03:16something

03:16that um and of course you know the ability to do to get some to get some efficiencies out of

03:22it is also

03:22helpful but it's something that is it was a really unique opportunity for us and when presented i

03:29thought you know we're supposed to move forward with it so are you finding that those skills are

03:34transferable in terms of you have all this experience with onboarding servicing loans loans that are being

03:40serviced uh but is is that transferable to uh mortgages that are being subserviced it is because i think

03:48you know we when you're a subservicer you have in the case of sendlar they have 100 clients these are

03:56large banks community banks independent mortgage banks and these many of these clients are clients

04:02of ours on the correspondent side so number one we also have great history in dealing with

04:07institutional clients and so as a part of the transaction there's confidence that those clients

04:14have in our ability to be able to serve their needs okay and understanding who the customer is

04:20what the customer's needs are and we have a reputation in our sector of of really working

04:27together with clients so um so the the transition the transition of those clients is something that

04:33is first and foremost in my mind and that transition will not start until the earliest 27. and so

04:40there i just i think it's i think it's it's something that is really um really really beneficial and then

04:47the one area where we don't have the the experience in is dealing with with the uniqueness of those clients

04:56and that's where sendlar has invested a lot of time and capital to build out a team that knows how

05:06to

05:06service those clients for their subservicing needs which are different than correspondent needs or

05:12servicing needs and so it's something that i think is going to is going to come together really nicely

05:17for for not only our clients but for their customers and that's something that i'm really

05:23excited about is to just deliver a really great experience that i'm delivering to our own servicing

05:30customers today to their customers it sounds like you're really focused on the strengths of their

05:37client support team absolutely absolutely and it's not just the client support team there are you know

05:42in mortgage banking we have this issue where you know you've got a generation of leaders who have

05:49spent the last 20 years fighting the fight of the great financial crisis and as they move on you know

05:56whether it's through retirement or to pursue other opportunities you know we have need for just more

06:03human talent and so you know they have a lot of good leaders at sendlar and the ability to combine

06:11these two organizations is one that's going to be really exciting for you know for me and it's not

06:16you know we you know the great thing about servicing is even with technology you still need

06:22you still need employees per you know you need one employee per x amount of loans and as we board

06:28more

06:28loans many of the many of the people we're going to need are going to come out of sendlar and

06:32so you're

06:33not it's not going to be this big synergy transaction for us yes there's synergies um but i think it's

06:40one

06:40that i'm really excited to see these two organizations come come together as one so one of the sticking

06:45points with a lot of mna and the reason that deals fail is folks can't integrate two different cultures

06:54so knowing that going into this deal what are you seeing in the sendlar culture so far that has you

07:01excited and what are you doing to prevent some of the cultural friction that can potentially come up in

07:06mna yeah so so my assessment of why deals fail and i don't have any experience with deals so we'll

07:13have

07:13to you know just from an observation point of view it takes place because the acquirer tries

07:20to mandate that the company they're acquiring take on the culture of the acquirer's company and so

07:30you know i spent a lot of time with david schneider the ceo of sendlar and leslie peeler you know

07:36the

07:36the chief operating officer of sendlar and you know and i've known them for many years i felt that we

07:44were very linked in terms of how we operate and then meeting the leaders of those companies i got very

07:50comfortable that this was you know the cultures were going to be a really nice fit so what really the

07:57the work that i've had to do is with the penny mac management team okay is to help them understand

08:04that there's really good people over there who are going to think like them and we just need to you

08:10know as we think about transition and integration we need to think of it you know as we as we

08:15operate

08:15the company of coming together identifying issues and really finding the logical solution and that's

08:22really how we operate and once and the key to the key to penny max success in many ways is

08:28once we

08:28decide on a course of action we move forward on the course of action a litigation time is over and

08:34we

08:34move forward and that's something that also exists at sendlar and so you know from what i'm hearing from

08:40from both sides is that the integration is going really well and so i'm really excited about that and

08:45it sounds like you're pushing um you know really more your team at penny mac to make sure that you

08:53know the cultural integration is a two-way street absolutely you're not enforcing a culture one way

08:58absolutely and we should and look we should listen to everybody in terms of other you know are there

09:05other ways to think about how you operate or solutions we're you know we've got a great track record and

09:11we have tremendous confidence in history and how we operate but that shouldn't stop us from what i

09:17often talk about internally of you know re-litigating key issues and asking if things change that would

09:24cause us to perhaps to operate differently do i expect there to be changes not a lot but i but

09:30i do think

09:31you know listening listening to leaders is something that's vitally important in the conversation before

09:37our on stage conversation uh you talked about this new office that you opened in dallas and i i think

09:45it signifies more than just a new office in dallas you're thinking about you know ways that you can bring

09:52two different parts of the company together can you talk a little bit more about that yeah so i'm really

09:57excited about what we're what we're what we're putting together in carrollton which is a suburb of dallas but

10:04you know first of all we're we're we're a multi-office location we're in southern california

10:10st louis dallas and tampa florida those are our main operational centers and i think it's you know

10:19from my perspective when i looked at dallas we had servicing people in fort worth we had production people

10:26in plano we had um corporate people in plano and we were in a multi-tenant building in in both

10:33and i

10:33felt you know for the company's sake i wanted to be in one building but more importantly from my

10:40perspective in our in our more in in mortgage banking the production and servicing worlds are

10:46coming together closer and closer when we buy servicing or which we do every day in correspondent and

10:53when we price since when we price servicing part of the pricing component is what is the value of

10:58the customer and what are our recapture opportunities going to be and so when borrowers want to refinance

11:04we want to be the we want to be the lender who refinances those borrowers well who's talking to

11:10those borrowers are servicing people okay and so and so you know and they run a call center and we

11:16run

11:16a call center and consumer direct and getting those two call centers to integrate is something that is

11:21really important for me and so being in the same building the same location is vitally important

11:27i think building a culture and and and having that culture together in one building is vitally important

11:34and so it's just something that's going to be very it's very exciting for me to see it's going to

11:40and

11:40likewise dallas is a hub of mortgage banking talent and as you've seen consolidation take place in the

11:46industry there's going to be mortgage banking talent that's going to be looking for other

11:51opportunities and i want to be able to give them an opportunity at penny mac so dominant in

11:58correspondent a major player in wholesale now dominant in subservicing with the acquisition of

12:06senlar you talked about consumer direct you've got a whole portfolio of things you're operating across

12:12the entire uh mortgage landscape um how are you prioritizing across those different aspects of the

12:18ecosystem yeah so i'll tell you that you know for all you know whether it's servicing subservicing

12:26of the three production divisions i don't prioritize okay they all they're all vitally important to me what

12:32is important to me across the enterprise is how we are investing in technology in particular how are we

12:39deploying ai into all of the company and that's something that you know i'm really excited to see taking

12:48place um we're seeing you know it's being led in our consumer direct channel where we're deploying

12:53some really exciting ai agents to help speed up the fulfillment process and do so at a lower cost to

13:02be

13:02able to close a loan in a shorter period of time it takes you can get a credit card in

13:08minutes now you're

13:09not going to get a mortgage in minutes but we as an industry have to shorten the amount of time

13:14it takes

13:14to get a mortgage especially a refinance when the borrower gets benefit immediately and so that's

13:20something that's really driving me in the organization furthermore we have to reduce our costs

13:25in originating a mortgage has consolidation has taken place in our industry the the amount of capacity

13:34we have in the industry is at a level that if rates were to decline 25 basis points you know

13:4137 basis

13:42points there's enough capacity to meet demand and what that means is margins are not going to expand

13:48as we've as quickly as we've historically seen them expand and so for us to continue to lead in the

13:56industry and to continue to deliver the return to our investors that we want that we want to deliver to

14:02them we have to focus on the cost to originate and the cost to produce and that's why there's just

14:08such

14:08a hyper focus on ai and deploying ai and there's a lot of you know i don't care what part

14:14of the

14:15company you're in there are opportunities to deploy ai to become more efficient now that doesn't you know

14:21that doesn't necessarily mean that we're looking to gut the organization because you know we have

14:26a lot of great people a lot of great talent and there's a lot of institutional knowledge and wisdom

14:31needed to run mortgage banking but in terms of the blocking and tackling we have to continue to

14:37address that to reduce our costs to originate and produce and to run the company is uh is is there

14:45one

14:45tech team at the company or is there a tech team that supports each of the divisions so we have

14:50one tech

14:51team that supports the infrastructure and the platform in terms of what we're doing with building ai

14:57agents we are moving more to we initially had one central technology team and now we're moving back

15:06to a structure that we had historically where each of the each of the groups will probably end up with

15:11their own team of ai ai talent to help them build the agents to help them do the work to

15:17become more

15:18efficient and is that because each of those divisions has a very specific process that that

15:24they need help with they it's a it's a it's a great question because i you know you want to

15:29make

15:29sure you're getting you know the benefits and the and the insight into what the other groups are doing

15:34but i think what's really important is i want to put the business leader in charge of building these

15:41agents we you know we demand our business leaders to you know to be efficient and and to look at

15:48running

15:48their businesses and deliver the returns that we want for them to deliver and so i want them

15:53to really be the leaders in terms of driving for change into driving for efficiency how are you

16:01because i mean that's really exciting i think as as a business leader but i think it can also be

16:06intimidating if you're asking folks to to really develop expertise in ai how are you helping them

16:13become uh the experts or the at least proficient that they what what they need to sort of like drive

16:21those kinds of business outcomes with ai so the and i don't mean to be tried here but the example

16:28i

16:28often give to people is look you all have masters of creating spreadsheets in your divisions can you

16:36create those spreadsheets probably not right okay but you you have that talent in your organization

16:42so my job is really to make sure that our leaders have the talent to build the a to really

16:49build the ai

16:50agents and to deploy you know ai technology into the business furthermore we need to really make

16:57sure our business our business leaders in these organizations are working closely with the technology

17:02resources in those organizations and it's and it's what's really i think important is that you don't

17:08treat ai you know as a as an industry we think of tech in a big bang kind of way

17:14we're going to do

17:14something big and we're going to deploy it in the case of ai just like in spreadsheets it's about a

17:20series of sprints it's about a series of you know i need to i need to build this and deploy

17:25it it's build

17:26and deploy build and deploy build and deploy is it going to be perfect the first go around

17:30i i think i truly believe you'll think it's perfect but trust me you're going to change that over

17:35time and that's how we need to think about it you seem like a leader who um thinks a lot

17:42about growth

17:43plans for growth loves organic growth how are you thinking about this next year and this sort of

17:51uncertain economic climate and you know if we were to talk again next year next april what would you

17:57want to have accomplished over the next 12 months yeah so we it's a great question which

18:02i get asked often i look i think we have a really unique opportunity one we we run a balanced

18:12business

18:12model so you know rates up 50 basis points rates down 50 basis points we're gonna we're going to be

18:19profitable and we're going to succeed from my perspective regardless of where rates are i want us

18:27to become more efficient and so you know driving driving that efficiency is something that is

18:34really as we've been talking about here is really front and center of my mind um i want to continue

18:40to

18:41see us lead in the market i think in correspondent we're a market leader i think we we've done a

18:47nice

18:47job building out a great business but i think also we've done it we've done it by you know pricing

18:53responsibly behaving responsibly and that's what leaders do um in the case of broker direct i want

18:59to continue to be a leader and broker and for you know i don't really quite frankly have any bias

19:07to

19:07whether you deliver to number one or number two um i will i want to be an alt i want

19:13to be a very strong

19:13alternative and i want to continue to show you as a broker that there's other that there's other ways

19:19to work with lenders and that's something you know we think of our brokers as partners and we and we

19:25listen very closely to them and so i would expect us to continue to expand our our our our role

19:32in

19:32doing non-qm loans um we're a leading jumbo originator and we're going to continue to grow that

19:38business in the consumer direct channel i really want to see us continue to number one grow our recapture

19:47of our servicing portfolio to be able to deliver lower rate loans to our existing customers i want

19:53to grow our purchase business yeah and that's something that we're focused on so do you think

19:57no matter what over the next year you are growing your servicing and subservicing book or that is that not

20:04the case it will grow it will grow i think in the because we have tremendous we have over a

20:10trillion

20:11dollars of servicing and you know when we started the company and we and we started in correspondent we just

20:16wanted to build scale on the platform and so i think in the case of correspondent you know in this

20:22last quarter we've seen on the conventional side we've seen the gscs very active as they're trying to

20:29meet their mandate to increase their portfolios to help keep that that mortgage to treasury spread tight

20:35and so as as we're not buying as much correspondent loans i i try to tell the team it's okay

20:42it's okay and

20:43you know it's it's a very profitable business and and that business ebbs and flows and we want to just

20:49you know be able to you know be able to wait just wait it out the gscs are not going

20:54to be active for

20:55eternity and that's and that's that's one of the advantages i think we get by having this big scaled

21:01servicing platform well david specter i know you don't do a lot of these conversations you're really

21:07good at it i'm so glad that you joined us today thank you i love your insights i hope we

21:13can do

21:13it again soon well the team at penny mac prepped me for this so you know thank you very much

21:17and

21:17thank you so much thank you

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