The CIT Group (NYSE: CIT) this week announced the completion of its exit from the reverse mortgage industry.
The financial services company closed on the sale of its Financial Freedom servicing arm and loan portfolio, CIT announced Monday. The deal was first disclosed in October, with an unnamed buyer and purchase price; the portfolio itself had about $900 million in unpaid principal balance.
In the same announcement, CIT also revealed that it had outsourced servicing of its remaining mortgages to an unnamed third party.
“These efforts support our plan to simplify CIT and gain grater efficiency in our business,” CEO Ellen Alemany said in a statement. “We have addressed another legacy issue by exiting the reverse mortgage business, and we have created greater efficiency in our ongoing operation by partnering with an industry leader to service our portfolio.”
The former Financial Freedom portfolio will be subserviced by Celink, sources told RMD last fall, with some Financial Freedom employees transferring to the reverse mortgage subservicing company. The unnamed buyer retained the servicing rights to the reverse mortgages as part of that arrangement.
CIT Group first acquired Financial Freedom in 2015 when it purchased its former parent company, OneWest Bank, in a $3 billion transaction. Before OneWest, Financial Freedom had been part of IndyMac, which OneWest purchased in 2009.
Written by Alex Spanko