Fremont General Corp., DBA Fremont Investment and Loan, said today that it has entered an agreement with Litton Loan Servicing to sell the remainder of its $12.2 billion mortgage loan portfolio.
As a result of the deal, Fremont intends to wind down its remaining loan servicing operation in Ontario, California, but said the deal does not involve the sale of its servicing platform.
Fremont expects the deal to close in the second quarter of 2008 assuming it satisfies customary closing conditions.
Assuming this deal, along with a previous agreement to sell its retail bank branches and deposits to CapitalSource Inc. are completed, Fremont will have sold substantially all of its remaining assets.
The company also said it plans to provide an update on its status and future plans in the near future.
Fremont General had previously been one of the top subprime mortgage lenders in the country, but curtailed operations after it received a cease and desist order from the FDIC, which claimed the bank was operating without sufficient risk management policies and procedures in place.
Shares of Fremont stood unchanged at 17.5 cents in trading Thursday on the over-the-counter bulletin board.
Update: Fremont said today that it may file for Chapter 11 bankruptcy protection in the absence of “another viable transaction.”