Brea-based Fremont General Corp. has closed on the sale of its last mortgage servicing rights, the company said Tuesday.
The company sold the business for $12.2 billion to Litton Loan Servicing LP, a Delaware-based affiliate of investment bank Goldman & Sachs. The deal includes all rights to service the loans and collect money.
Fremont General is the holding company for Fremont Investment & Loan, once one of the country’s largest issuers of subprime home loans.
Many expect the company, with $8.8 billion in assets, to file for bankruptcy to complete the sale of its banking art to Maryland’s CapitalSource Inc.
Fremont said it may not be able to put together a shareholder solicitation required by the Securities and Exchange Commission to complete the deal.
Filing for bankruptcy could allow the deal to go without a shareholder vote under bankruptcy court proceedings.
Fremont came into trouble last year when its loans began to default and regulators ordered it to stop making subprime loans. It was given an ultimatum earlier in the year to raise money or sell itself.
In November, a group of Orange County bankers led by Chief Executive Stephen Gordon took over Fremont and moved the company’s headquarters from Santa Monica to Brea.
Gordon once ran Irvine-based Commercial Capital Bancorp Inc., which Washington Mutual Inc. bought for $1 billion in 2006.
