ITT Corp. has completed a piecemeal sale of its financial services unit, including its home mortgage subsidiary, ITT Residential Capital Corp. It did not disclose the buyers.
The parts of the financial company were sold in 20 transactions for gross cash proceeds of $5.5 billion, close to the units' combined book value.
The company announced in September 1994 it was putting its financial services units on the block because they did not fit in with ITT's long- term strategy, according to a spokesman.
Besides home mortgage originations, the sale also included Lyndon Insurance Group's financial insurance business and a portfolio of real estate loans and properties in Southern California.
This sale is just the latest in the continuing consolidation of the home mortgage industry. In March, the largest mortgage company ever offered - Prudential Home Mortgage Co. - was put on the auction block. Its parent, Prudential Insurance Company of America, said it wanted to concentrate on its core business.
The chairman, president, and chief executive of ITT, Rand V. Araskog, said, "We are very pleased to complete the transaction with such excellent results. This represents the completion of yet another step in ITT's ongoing program of enhancing shareholder value."
Despite its intended move away from home mortgage lending, ITT had beefed up its wholesale mortgage unit in February. It expanded the business in Maryland and Virginia, opening a new office to work with mortgage brokers.
The company said the move was an effort to add profitability to its financial operations to make them more attractive to prospective buyers.
The new wholesale office offered "B" and "C" loans to people with blemished credit records.
There was little speculation in merger-and-acquisition circles over who the buyer of the mortgage operation might be.
Estimates are that it could have fetched about $200 million. Buyers are generally eager to announce their purchases, especially when they involve a significant amount of servicing rights that could affect their ranking.