CIT Bank to sell reverse mortgage biz, portfolio

An undisclosed buyer agreed to acquire about $900 million of reverse mortgage whole loans from the bank

CIT Bank to sell reverse mortgage biz, portfolio
CIT Bank has inked a deal to sell its reverse mortgage servicing business, Financial Freedom, along with its reverse mortgage portfolio to an undisclosed buyer.

The agreement covers about $900 million of reverse mortgage whole loans as well as mortgage servicing rights and real estate owned assets as of June 30.

"This transaction marks another step in our plan to simplify CIT," CIT Chair and CEO Ellen Alemany said. "Throughout this year, we have made continued progress in transforming the company and applying our focus toward maximizing the potential of our commercial-banking and deposit franchises, which are the core of our go-forward strategy. We are pleased to have reached this agreement, which will enable CIT to exit the reverse mortgage business."

CIT said the sale is expected to close in the second quarter of 2018. The deal is subject to certain regulatory and investor approvals and other customary closing conditions. 

The bank acquired Financial Freedom as part of its purchase of OneWest Bank in August 2015. CIT has since reported the business as discontinued operations and reported the reverse mortgage portfolio as part of its continuing operations.

CIT, which is the bank unit of CIT Group, was advised by Houlihan Lokey as financial advisor and Sidley Austin as legal advisor.

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