Shares in Fremont General Corp. surged Wednesday morning after the company said it has agreed to sell $4 billion of its sub-prime residential loans at a steep discount.

The Santa Monica-based lender and banker said it expects to see about $140 million in pre-tax losses from the sale; adding that it has already sold $950 million worth of the risky loans. Fremont did not disclose any of the buyers or potential buyers.

Fremont also said that it will continue to lend money through its profitable commercial mortgage lending arm and will also continue to operate its more than 20 retail banking branches in the state.

This comes two days after Fremont announced that it had officially given all 2,400 employees in its subprime lending division notice that they could lose their jobs by May 19.

However, the move was largely procedural; being that state law requires employers to give 60-day notice for “a plant closing or mass layoff.” According to Fremont, “many” of its subprime lending employees are currently on paid leave.

Shares in Fremont shot up $1.13, or 12 percent, to $10.17 in afternoon trading Wednesday on the New York Stock Exchange. Shares in Fremont have gained 60 percent in the past week.