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# Subprime lender sells business
- URL: https://www.smdp.com/subprime-lender-sells-business/
- Published: 2007-03-27T15:00:00.000Z
- Updated: 2026-10-24T00:18:47.000Z
- Author: Melody Hanatani
- Tags: Business, Santa Monica, #archive-import

*Fremont General Corporation unloads its controversial residential loan operations for $4 billion*

OLYMPIC BLVD. The national real estate lending company whose subprime residential operations came under fire by the federal government has found a buyer to take the loans off its shoulders.

Santa Monica-based Fremont General Corporation announced last week that it reached an agreement to sell approximately $4 billion of its sub-prime residential loans at a discount, “reflecting current conditions in the sub-prime mortgage market,” according to a company release last week.

Approximately $950 million in cash has already been paid to Fremont Investment & Loan — the subprime lending portion of Fremont General Corporation — as the first installment.

Fremont General Corporation stands to lose approximately $140 million in pre taxes in selling the loans.

The company announced earlier this month that it will be selling the subprime residential real estate lending portion of the company and hired Credit Suisse Securities as the financial advisor to oversee the sale of the business.

The corporation provided loans in 47 states in the fourth quarter of 2006.

Fremont General Corporation was acting in response to a cease and desist order issued by the Federal Deposit Insurance Corporation, which criticized the company for lacking proper risk management policies regarding its subprime residential and commercial real estate loans. The company consented to the terms of the cease and desist order without admitting to the allegations.

Fremont Investment & Loans was operating its business and providing mortgage loans to customers with bad credit in a way that increased the possibility that the borrower would fail on their end of the bargain, the order alleged.

A representative from Fremont General Corporation did not return a call on Monday seeking comment.

*Originally published in the Santa Monica Daily Press print edition on March 27, 2007.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/032707.pdf?ref=smdp.com)