Fremont General Corp. is selling the servicing rights on certain securitized mortgage loans to Carrington Capital Management LLC, which has bought other servicing rights for subprime mortgages.
The mortgage loans have a total remaining principal balance of nearly $2 billion, which is about 13 percent of the total principal balance currently serviced by Fremont, formerly one of the nation's leading subprime lenders.
Carrington, based in Greenwich, Conn., spent $188 million last year to win the servicing rights to mortgages held by New Century Financial Corp., an Irvine-based subprime lender that went bankrupt.
The sale and cash infusion comes as Fremont is attempting to remain in business after it suffered huge losses making subprime mortgages. The company was forced out of that business last year by regulators.
The company has since moved from Santa Monica to Brea, where its remaining retail banking subsidiary is based. The company operates 22 Fremont Savings & Loan branches in the state.
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