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CIT reaches deal to sell Financial Freedom

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CIT reaches deal to sell Financial Freedom

In line with CIT Group Inc.'s simplification push, CIT Bank NA has reached a deal to sell its reverse mortgage servicing business, Financial Freedom. The Pasadena, Calif.-based bank is also selling its reverse mortgage portfolio.

The buyer was not disclosed.

Included in the sale are mortgage servicing rights and approximately $900 million of reverse mortgage whole loans, including other real estate owned assets, as of June 30.

The deal, which is still subject to regulatory and investor approvals, is expected to close in the second quarter of 2018.

The company expects to record a third-quarter $40 million to $50 million pretax charge in connection with the deal. Upon completion, it expects to record a pretax net gain of $25 million to $35 million.

Houlihan Lokey and Sidley Austin served as CIT's financial adviser and legal counsel, respectively.