CIT Reports Mortgage-Related Loss

The CIT Group, New York, posted a net loss of $130.7 million ($0.69 per share) for the fourth quarter, primarily because of problems in its home lending business and its student lending business, says chairman and chief executive Jeffrey M. Peek. During the quarter, CIT recorded a $297 million increase in its reserves for credit losses, including a $250 million reserve for its held-for-investment home lending portfolio. This reduced its EPS by $0.96. In addition, CIT took a $42 million charge related to home lending receivables held for sale, which had the effect of reducing EPS by $0.14. It also had a pretax loss of $13 million ($0.04 per share) in home lending, excluding the above items, due to an impairment of retained interests on past off-balance-sheet securitizations.