Centerbridge Capital Partners LLC is seeking to sell Green Tree Servicing LLC, the loan servicer it acquired in 2007, for about $1 billion, according to two people with knowledge of the matter.

Morgan Stanley is running the sale and has contacted private-equity firms and potential strategic buyers about purchasing Green Tree, said the people. Green Tree has about $175 million of annual earnings before interest, taxes, depreciation and appreciation, the people said.

Green Tree, of St. Paul, Minn., has increased the volume of loans it services by about 50% since a Centerbridge-led group acquired it from Fortress Investment Group LLC and Cerberus Capital Management LP, one of the people said. It had $34 billion of servicing assets under management in 2009.

The company, which says on its website that it is the largest servicer in the U.S. for manufactured housing loans, also services residential mortgages, second liens and home equity lines of credit. Green Tree has more than 1,800 employees in 29 offices.

In 2004, Green Tree bought an $8.6 billion manufactured home loan servicing portfolio from North Fork Bancorp, which had acquired it with its purchase of GreenPoint Financial Corp. (North Fork is now a part of Capital One Financial Corp.) Green Tree subsequently bought a similar portfolio from Bombardier Inc.

Fortress, Cerberus and J. Christopher Flowers' private-equity firm purchased Green Tree in 2003 from the insurer Conseco Inc. for $850 million, before selling it to Centerbridge.

Conseco had bought Green Tree Financial Corp. in 1998 for $6 billion, and the bad loans that accompanied the acquisition eventually pushed the insurer into bankruptcy.

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