NEW YORK, April 30, 2026, 09:02 EDT
- Rosen Law Firm is moving to file a class action targeting PennyMac Financial Services, aiming to recoup losses for investors following the company’s earnings release in January.
- Schall Law Firm has launched its own probe into whether PennyMac gave investors inaccurate or incomplete information, or left out details that mattered.
- PennyMac’s servicing segment took a sharp hit in the fourth quarter, with pretax income dropping to $37.3 million—down from $157.4 million just one quarter earlier.
PennyMac Financial Services Inc. is back under the microscope after its shares tumbled 33.3% in a single day following its January earnings report. Now, two shareholder law firms are ramping up pressure on the mortgage lender, zeroing in on the company’s servicing business.
Rosen Law Firm on Wednesday said its investigation into potential securities claims is ongoing, and it’s putting together a class action for investors hit with losses. The same day, Schall Law Firm issued its own notice, stating it’s probing whether PennyMac made misleading statements or left out key information investors should have known.
PennyMac’s timing couldn’t be much worse. These notices landed just days ahead of its first-quarter earnings report, expected after the bell on May 5—an update investors will be combing for any hint that the servicing setback is letting up.
Mortgage servicing rights—MSRs—are the real issue in play here: they grant firms the right to collect a stream of fees for processing mortgage payments. But when homeowners refinance or pay off their loans ahead of schedule, that fee income can drop off. On Jan. 29, PennyMac reported a 70% plunge in pretax income for its servicing segment (excluding valuation items) from the previous quarter. The culprit? A spike in MSR cash flow realization, with lower mortgage rates fueling more prepayments.
PennyMac didn’t turn in a uniformly soft fourth quarter. Net income came in at $106.8 million, or $1.97 a share diluted, with total net revenue at $538.0 million. The production segment actually saw pretax income climb to $127.3 million from $122.9 million the previous quarter.
Servicing was the story behind the market’s move. Pretax income from that segment slipped to $37.3 million—down sharply from $157.4 million in the third quarter and $87.3 million for the same period last year. Rosen noted PennyMac shares dropped $49.78, finishing at $99.92 on Jan. 30 after the news hit.
David Spector, chairman and CEO, pointed to “strong production results” in the January statement, but noted that “increased runoff on our MSR asset” cut into that performance as prepayment speeds picked up. Spector added that for the full year 2025, the company booked double-digit earnings growth in both of its operating segments. PennyMac Financial Services, Inc.
Competition’s heating up, too. On the earnings call, Spector noted PennyMac saw higher lock volumes after rates dipped early on, but pointed out that “excess capacity has created a more competitive origination market,” according to HousingWire. HousingWire
PennyMac isn’t the only one feeling it. Rocket Companies, which finished its Mr. Cooper buyout on Oct. 1, 2025, reported mortgage servicing rights worth $19.44 billion at year-end—up sharply from $7.63 billion the previous year. The jump explains why servicing assumptions get heavy scrutiny from investors watching nonbank mortgage lenders.
One thing to note: these are legal inquiries, not verdicts. The law firm alerts amount to investigations or offers to represent, not conclusions about blame. Rosen laid out a potential class action; Schall mentioned it’s still looking into the claims. Neither announcement proves liability on its own.
PFSI closed out Wednesday at $89.18, well off the $99.92 mark from after the January downturn. Now, all eyes turn to next week’s report, when PennyMac will have to prove production growth can counter choppy servicing results—and do it without eating into margins.
