CIT Home Lending - Subprime

Update, July 22nd: We have moved this operation to the ailing/watch list, as we have confirmed it is still operating. We will be watching to see if it is sold, and if so, what kind of price it fetches. Let us know if you see any relevant activity.

Update, July 19th: A number of people have written in to clarify that the CIT Home Lending unit is still operating and still taking business. CIT is apparently looking for a buyer for the division.

CIT Group, a major conglomerate lending and investment shop, is exiting the home lending business entirely, after taking an "unexpected" (hah!) loss of $127 million in the second quarter. The above Bloomberg article has more:

Chief Executive Officer Jeffrey Peek decided to quit the home-loan business, focused on subprime lending to borrowers with weak credit or heavy debts, after late payments rose and investor demand for mortgages waned. ....

The loss ``blindsided the market,'' said a report by Royal Bank of Scotland credit analysts including Corinne Cunningham. ``CIT has until now claimed to have a subprime book that was better than average.''

CIT Home Lending operates the brokeredge.com portal.

CIT also has a major student lending business (Student Loan Xpress), which earlier had to pay a $3 million penalty to New York state for conflicts of interest. That unit may be the next to go, analysts quoted by Bloomberg say.

The company was spun off from Tyco International in 2002.