NEW YORK–(BUSINESS WIRE) CIT Group Inc. (NYSE: CIT), a leading global commercial finance company, announced today that it has agreed to sell its Home Lending business, consisting of $9.3 billion in assets and related servicing operations, to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities. The servicing centers, which employ approximately 300 people, are located in Marlton, NJ and Oklahoma City, OK.

In a separate transaction, CIT agreed to sell its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million. Net cash proceeds from the two transactions are expected to be approximately $1.8 billion.

In the second quarter of 2008, CIT expects to record an estimated pretax loss for the Home Lending segment of approximately $2.5 billion ($2.0 billion after tax). This loss consists of an estimated $2.2 billion loss on sale and an approximate $350 million loss from operations during the period. Home Lending will be accounted for as a discontinued operation. The sale of the portfolios is scheduled to be completed in July, while the transfer of the servicing platform will be completed by the first quarter 2009. It is expected that the company’s proforma tangible equity to managed assets ratio at June 30, 2008 will be in excess of 9%, above the company’s current 8.5% target.

The Federal Reserve Was Ready to Make Lending Available to Other Brokers on Same Day They Helped Out Bear Stearns; Borrowers at Discount Window Included Goldman Sachs, Morgan Stanley and Lehman Brothers.

Golden Goldman Sachs reports. Another record-breaking year for the world’s largest securities firm. Meanwhile, the European Central Bank injects billions into money markets and the US Federal Reserve considers new mortgage protections.

Brokerages to Report Earnings This Week: Goldman Sachs, Morgan Stanley, Bear Stearns. Brokerage Earnings Outlook with Howard Silverblatt of S&P.

Fannie Mae Ties 3Q Losses to Alt A Mortgage Market

Over 25% of Fannie Mae’s credit losses in the third quarter came from its book of guaranteed alternative A mortgages, according to the company’s president and chief executive officer, Daniel Mudd.

The giant secondary market agency has guarantees on $324.7 billion in alt A mortgage backed securities, which had a serious mortgage delinquency rate of 1.36% as of Sept. 30.

“Alt A drove about 28% of Fannie Mae’s total credit losses in the most recent period,” Mr. Mudd told a Goldman Sachs investor conference. “this book gets an awful lot of attention”.

Only 40% of its guaranteed alt A loans have credit enhancements, which suggests many are piggy backed with second liens. The weighted average credit score is 719.

Fannie took $1.2 billion in credit related expenses in the third quarter, including a $670 provision for credit losses on delinquent loans it purchased out of Fannie-guaranteed MBS.

HSBC Will Take on $45 Billion of Assets From Two SIVs

HSBC Holdings, Europe’s largest bank, will bail out its two structured investment vehicles, taking on $45 billion of assets to avoid a fire sale of bonds.

Investors in Cullinan Finance Ltd. and Asscher Finance Ltd. will be allowed to exchange their SIVs for debt issued by a new company backed by loans from HSBC, the London-based bank said in a statement today. HSBC said it doesn’t expect any “material impact” on its earnings or capital strength.

HSBC’s rescue shows the world’s second largest bank manager of SIVs, companies that borrow short term to invest in higher yielding securities, isn’t prepared to wait for the $80 billion “SuperSIV” to start buying assets.

Bank of America, Citigroup and JPMorgan Chase & Company have been working for more than two months to set up the fund initiated by U.S. Treasury Secretary Henry Paulson.

The SuperSIV is “is all good and well, but it’s not big enough,” said Tom Jenkins, a credit analyst at Royal Bank of Scotland in London. “If you have a large SIV, you’re going to need to find another solution.” HSBC may have to set aside a further $12 billion for bad debts as customer defaults at its U.S. subprime lender Household International Inc. spread, analysts led by Roy Ramos at Goldman Sachs in Hong Kong wrote in a note dated November 24. They lowered the rating on the stock to sell from neutral.

Merrill Lynch Financial Services Conference Continues. Interview with Mark McCollom, CFO of Sovereign Bank.

Goldman Sachs To Start Three New Hedge Funds. Analysis of Bank Stocks. Analysis by James Bevan, CCLA Investment Management.

Goldman Sachs Set Aside $16.9 Billion for Pay and Bonuses, Topping Last Year’s Record of $16.5 Billion. 2007 Bonuses May Fall 15% for Fixed Income Traders, May Rise 20% for Investment Bankers

Goldman Sachs Big Pay Day. Bonus money enough to buy Bear Stearns.

Bear Stearns rocked by the collapse of two hedge funds in the subprime mortgage crisis, said today that its third-quarter profit plunged 61 percent, hitting the lowest level in five years and topping off a painful summer for the Wall Street brokerage firm.

Bear’s bearish news stood in sharp contrast to a superlative performance by Goldman Sachs, which posted a 79 percent rise in third-quarter profit, led by strong results in its investment banking, currency and commodities divisions.

Meanwhile, Bear’s profits were brought down by diminished fixed-income revenue coupled with a $200 million loss from its June hedge fund failures.

Bear has posted net income for the quarter of $171.3 million, or $1.16 a share, down from $438 million, or $3.02 a share, in the period a year earlier.