PennyMac Financial Services plans to open a new facility in Tennessee, as it further expands its footprint in the direct-to-consumer market.

The national lender and servicer will invest $3.9 million to establish a new mortgage originations center in Williamson County south of Nashville, a move that is expected to add over 300 new jobs in the area. The location will serve its consumer-direct lending business, according to the Tennessee Department of Economic and Community Development.

“Extending Pennymac’s operations into Tennessee will boost our coast-to-coast coverage allowing us to join a thriving business community with a superb talent pool,” said Doug Jones, Pennymac’s president and chief mortgage banking officer. “The added support will reinforce our strong stance on providing excellent customer service, while supporting the organization’s overall growth initiatives.”

Consumer-direct lending has played a larger role at the company over the past few years. After the first nine months of 2021, Pennymac held an estimated 1.4% share of direct-to-consumer lending volume, according to company leaders in a November earnings presentation. They said that was double its percentage since the end of 2019. Its direct-lending divisions, including both broker and consumer, have had an “outsized impact” on production earnings, said Pennymac chief financial officer Dan Perotti.

In the third quarter of 2021, Pennymac’s consumer-direct channel generated 80% of the Westlake, California-based company’s production revenue, contributing a net $446.7 million. A year earlier, the lender reported a similar amount — $445.7 million — of direct-to-consumer revenue, which then only accounted for 57% of its overall total. The channel produced $11.1 billion worth of loans between July and September last year, up from $6.3 million in the third quarter of 2020. Jones has attributed the success of consumer-direct efforts to the increased application of data analytics and investments made in loan-fulfillment and sales processes.

Consumer-direct lending experienced an elevated level of activity since 2020 as more consumers moved online during the coronavirus pandemic, but the past few months have seen layoffs at companies that had been aiming for further growth in the DTC space, including Wyndham Capital and Interfirst Mortgage.

The expansion news comes after Pennymac, consisting of PennyMac Financial Services and PennyMac Mortgage Real Estate Investment Trust, announced a rebranding initiative earlier this month, bringing both affiliates under the Pennymac name and unveiling a new logo. The company also recently renamed the PennyMac broker direct unit Pennymac TPO.

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