CIT Group, New York, has cut a deal to sell its residential subprime business -- including a $9 billion servicing portfolio -- to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion in debt. Among subprime servicers, CIT ranks 18th nationwide, according to the Quarterly Data Report. In a separate transaction, CIT agreed to sell a $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance for $300 million. CIT said the two sales will bring in $1.8 billion in cash. Even so, it will book a $2.5 billion pretax loss in the second quarter.
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