Fremont Selling $4B in B&C Loans at a Loss

Fremont General Corp., Santa Monica, Calif., has agreed to sell $4 billion in subprime loans to an unnamed buyer (or buyers) -- but will book a $140 million loss on the deal.It is unclear whether servicing rights tied to these loans are also being sold. The lender could not be reached for comment. Fremont is trying to sell its subprime division, which services $27 billion in loans but has stopped funding new originations. Fremont, a depository, said it has received "approximately $950 million in cash from the first sale installment under the agreements, with the remaining sales under the agreements expected to be completed over the next several weeks." The company, in a filing with the Securities and Exchange Commission, said the mortgages are being sold at a discount, "reflecting current conditions in the sub-prime mortgage market."