CIT Sells Home Loan Unit for $1.5 Billion

In a continuing attempt to prop up its balance sheet and stem the slide of its debt rating, CIT Group(CIT Quote) is abandoning the residential loan business.

The commercial finance company said it would sell its home lending business to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion in debt. The business employs roughly 300 people and consists of $9.3 billion in assets and related servicing operations. CIT also is unloading a manufactured housing portfolio valued at $470 million to Vanderbilt Mortgage and Finance for approximately $300 million.

"We made the decision one year ago to exit the home lending business," CEO Jeff Peek said on a conference call. "The transactions will take us completely out of the business." ...