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Fremont selling mortgage rights to Goldman affiliate

Reuters - Friday, May 9

NEW YORK, May 8 - Fremont General Corp , which quit subprime mortgage lending last year, on Thursday said it agreed to sell its remaining mortgage servicing rights to Litton Loan Servicing LP, an affiliate of Goldman Sachs Group Inc .

Terms were not disclosed. Fremont said the sale covers servicing rights on a $12.2 billion serviced loan portfolio of its Fremont Investment & Loan unit.

Fremont said the sale does not include its loan servicing platform, but that it intends to close its remaining loan servicing business in Ontario, California. It expects the sale to close this quarter, pending regulatory approvals.

Fremont said it has now contracted to sell substantially all assets of Fremont Investment & Loan, including a planned sale announced last month of its bank branches and deposits to CapitalSource Inc .

Based in Brea, California, Fremont was one of the nation's 10 largest subprime lenders until the Federal Deposit Insurance Corp ordered it in March 2007 to stop making risky home loans.

In March, the FDIC declared Fremont undercapitalized, and ordered it to raise money or find a buyer by May 26.

Fremont hired Credit Suisse and Sandler O'Neill & Partners LP to help it explore options.

More than 100 mortgage lenders have sold their businesses or stopped offering home loans since the U.S. housing slump began.

Fremont said it soon intends to update its status and future plans.

Shares of Fremont closed Thursday unchanged at 17.5 cents. Their 52-week high is $13.80, set last May 31.

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