CIT Home Lending - Subprime
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stories: foxnews.com, streetinsider.com, dallasnews.com, housingwire.com, thestreet.com, bloomberg.com, marketwatch.com, bloomberg.com
Update - 2009-11-02: When it was announced today that CIT had filed bankruptcy, we realized we had not added the final chapter to the story here about CIT Home Lending.
Dallas, TX based Lone Star Funds closed on the deal to buy CIT Home Lending's assets on 2008-07-08 according to the press release by CIT. As previously reported by Dallas News, Lone Star Funds paid "$1.5 billion in cash and assume[d] $4.4 billion in debt and other liabilities in exchange for the CIT unit's $9.3 billion in assets and related servicing operations in Oklahoma City and Marlton, N.J." The operations employed 300 people according to Housing Wire.
Along with the sale of its loan servicing business to Loan Star Funds, CIT also unloaded its manufactured housing portfolio at a considerable loss. Housing Wire had this:
"CIT also said it had agreed to sell its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million -- effectively pushing the commercial finance company out of mortgages and home loan servicing altogether."
Update - 2008-12-23: CIT Group has obtained federal approval to convert to a bank holding company, a move that will grant it access to federal rescue funds. According to TheStreet.com CIT also received preminary approval for a $2.33 billion investment of TARP funds in exchange for a preferred equity stake in the company. Bloomberg reported the Fed's approval will allow CIT to retain some non-banking subsidiaries, but the article goes on to note the company is "making fewer loans, tightening lending standards and raising borrowing costs for customers."
Original Listing - 2007-08-28: Marketwatch has reported that CIT is taking a $35 million charge to "shutter" CIT Home Lending:
A source wrote in with the following additional details:
The Grapevine at BrokerUniverse also has a thread on the closure.
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:
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.
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.