CIT Group in New York has reached an agreement to sell its reverse mortgage unit, a source of many headaches for the company in recent months.
CIT agreed to sell the $900 million portfolio, along with its Financial Freedom reverse mortgage servicing business, to an undisclosed buyer. The terms of the deal, expected to close in the second quarter of 2018, were not disclosed.
“This transaction marks another step in our plan to simplify CIT,” Chairwoman and CEO Ellen Alemany said in a press release Friday.
The sale comes as Alemany continues to transform the $50 billion-asset company into a traditional middle-market lender. Over the past year, CIT has shed international business lines and completed the sale of a $10 billion commercial aircraft leasing portfolio.
The Financial Freedom unit, which CIT inherited through its acquisition of OneWest in August 2015, has long been a thorn in the company’s side. Accounting problems in the reverse mortgage business forced CIT to delay filing its annual report last year. CIT also paid $89 million in May to settle federal charges that it improperly applied for reimbursement on mortgage insurance claims through the Federal Housing Administration.
Alemany, notably, was recognized as one of American Banker’s Most Powerful Women in Banking this year, in part because of the progress she has made in reinventing CIT.