Stanford L. Kurland - Chairman of the Board of Trustees, Chief Executive Officer David A. Spector - President, Chief Operating Officer, Trustee Anne D. McCallion - Chief Financial Officer

Presenting to you today will be Stan Kurland, Chairman and CEO of PennyMac. Also joining Mr. Kurland are David Spector, PMT's President and Chief Operating Officer who will present an overview of the markets, and Anne McCallion, PMT's Chief Financial Officer, who will present PMT's financial results.

Welcome. Before we begin, please take a moment to review the important disclosure on Slide 1 regarding the forward looking statements. Slide 2 summarizes many of our accomplishments for the quarter. During the quarter we won bids on two portfolios totalling $140 million in unpaid principle balances. We have completed closing one of the portfolios and anticipate closing the second in the coming weeks, although we cannot guarantee that this transaction will close. We also added $24 million in short-term mortgage-backed securities to the balance sheet. Our manager has also remained very active, reviewing residential whole-loan portfolios totalling over $7.4 billion in unpaid principle balances and submitting bids on $6.2 billion of loans that had been evaluated. In addition, our manager has worked to expand our ability to source and monetize assets through a variety of channels and has made significant progress on several initiatives that will significantly expand PMT's ability to adapt to the changing dynamics of the mortgage market. We provided an initial overview of the first initiative in our presentation of the third quarter results. That initiative is the build out of a conduit platform that will allow PMT to purchase newly originated loans from small mortgage lenders and repackage those loans for securitization and sale. Our manager is also working to establish partnerships that will facilitate participation and securitization activities. Finally, our manager has begun to actively pursue opportunities to acquire troubled mortgage assets that result from distressed condominium development projects. During the startup phase of our investment activities, operating costs exceeded interest income which resulted in a net loss of $1.15 million or $0.07 per share. Slide 3 is a brief review of PMT's structure and investment thesis. We are a very new enterprise with significant resources devoted to investing prudently. In today's presentation we…

Thank you, Stan. Looking at the charts on slide eight, we can see the following: Unemployment continues to weigh on the overall economy. In December, the unemployment remained at double digits at 10%, while 85,000 jobs were lost. The average worker remained unemployment for 29.1 weeks last month, which was the longest average length of unemployment since record keeping began in 1948. In addition, we are witnessing a developing trend of workers opting out of the labor force. Approximately 1.7 million Americans have opted out since July of 2009, representing a 1.1% decline. According to the Labor department, this is the largest six month decrease since 1961. Participation rate for the share of the population in the labor force has fallen below 65%, its lowest level since 1985. These figures support the rise in the volume of distress mortgages we have seen as borrowers struggle to keep pace with their financial obligations. On a more positive note, disposable personal income in the U.S. savings rate is at 4.7%, remaining steady in November. Likewise, household financial obligations declined in the third quarter to the lowest rate since the first quarter of 2001, while consumption as a percentage of income remained at historically low levels. This data suggests that consumers may be managing their personal finances more effectively, which may support an optimistic outlook for the likely sustainability of mortgage modification and restructuring programs. On slide nine we have a review of the current housing environment. For most of the second half of 2009, the housing market appeared to be on the path toward recovery, supported by government intervention. However, after three months of increases, sales of existing homes fell 16.7% in December, but remained above December 2008 levels. Much of the increase from 2008 to 2009 could be attributed to first…

Thank you, David. As you might perceive from David’s comments, the mortgage arena has undergone, and continues to undergo, very dramatic changes. One of the most significant shifts we have had to deal with is how and where we source attractive investment opportunities. Over the past several months, we have worked to evolve our investment pieces to include a broader array of investment opportunities. Slide fourteen is a review of our initial asset focus. Our primary focus has always been on investing in troubled residential whole loans. Our definition of troubled mortgages includes performing and non-performing loans. The operations of our investment advisor and our servicer should generate returns for PMT through value enhancement and monetization of those assets. The investment objectives for performing loans is value enhancement through effective, high-touch servicing, and the ability to implement long-term sustainable loan modification and restructuring programs that keep borrowers in their homes. Alternatively for non-performing assets, the ability to affect property resolution in a timely, orderly, and economically efficient manner is essential to generating attractive returns. We have also used investments in short-term mortgage-backed securities as vehicles to put capital to work, pending the anticipated reinvestment in suitable pools of mortgage loans. The FDIC has always figured prominently in our asset acquisition strategy. In December 2008, prior to the PMT initial public offering, our investment advisor successfully acquired a pool of performing and non-performing residential mortgage loans with unpaid principal balances of approximately $558 million in the FDIC’s first structured transaction of residential mortgages. We bid and lost on the FDIC auction of Franklin Bank’s residential mortgage loan portfolio in the third quarter of 2009, and the FDIC did not bring any mortgage related assets to market during the fourth quarter. We do expect, however, that they will auction three of more…

Our unaudited statement of operations for the quarter ended December 31, 2009 and for our initial five months of operations is shown on slide nineteen. Because the proceeds of our stock offering have been invested in short-term mortgage-backed securities and money market funds pending acquisition of suitable longer term investments, our primary source of revenue for 2009 was interest income, which amounted to $1.6 million for the quarter and $2.1 million since our operations began. The company incurred $2.6 million in expenses for the quarter and $4.2 million since the commencement of operations. The primary components of expense are management fees and compensation, which consists of reimbursement for services associated with being a public real estate investment trust, trustee fees, and stock based compensation. PMT reported a net loss of $1.2 million, or $0.07 per share, for the quarter and $1.9 million, or $0.11 per share since its commencement of operations. Our manager’s activities in our first five months of operations fall generally into three categories: Building the requisite operating systems, processes, and governance structure; overseeing and administering our day to day operations and investment activities; and building the infrastructure that will allow us to source assets through non-traditional channels and transactions. In this regard, our manager has hired new staff, deployed existing staff, invested in technology, and developed external relationships to facilitate such investments. Examples include commencing the building of a conduit platform, working with PLS to design and deliver customized condo financing solutions, and working to design securitization programs tailored to portfolio holders’ requirements. PMT’s unaudited balance sheet as of December 31, 2009 is shown on slide twenty. PMT entered the quarter with $324 million in assets. At year-end, virtually all of PMT’s assets were deployed in short-term money market funds, mortgage-backed securities, and residential whole loans, which…

This concludes management’s presentation of results for the fourth quarter 2009. Thank you for joining us. Please forward any questions or comments to InvestorRelations@pnmac.com. We look forward to receiving and responding to your feedback.