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 Board on Thursday announced its approval of the notice of Bank of America Corporation, Charlotte, North Carolina, to acquire Countrywide Financial Corporation ("Countrywide"), Calabasas, California, and thereby indirectly acquire Countrywide Bank, FSB, Alexandria, Virginia, and certain other nonbanking subsidiaries of Countrywide.

Attached is the Board’s Order relating to this action.

Attachment (1.38 MB PDF)

It is not just Bank of America that is reeling from subprime problems, the largest banks in the world have posted $290 billion of credit losses, since the beginning of 2007.

JP Morgan CEO Jamie Dimon is quadrupling the price of Bear Stearns from the price he agreed o pay just nine days ago and yet he is still managing to get kudos for the deal.

I think he made a steal. I think what will happen as five or 10 years and now when we do not remember what the Subprime Mortgage Industry is about, they will spin that off at a very significant profit.

It was a very rocky day for shares of Countrywide Financial. A lot of news and speculation. This all started this morning around 11:00, 1-8-2008. The stock went straight down. We called around, and it was tough to find people who knew what was going on. We were able to track down a number of the traders who told us this was living on bankruptcy speculation, and it kept going down. The stock was down by as much as 25%, and early in the afternoon, trading was halted. Countrywide put out a statement saying there is no truth to this, and the stock came back, but it is still down almost 20%.

What is going on now is that Countrywide, according to a report from Dow Jones news service, is potentially in talks to sealy deal with Bank of America. Bank of America buying it out right. Bank of America bought a $2 billion stake in Countrywide during the summer and that happened at a time when Countrywide was desperately searching for capital. Since then, things have deteriorated and Countrywide has had rising foreclosures.

“Well capitalized senior financial companies will eventually profit from the ongoing demise of the smaller home mortgage lender competitors. This is basically what we’ getting today. Bank of America will buy a weaker mortgage player, and they will be stronger going forward. I think this is great news for Bank of America shareholders”.

Investors who stuck with Countrywide may come as welcome relief. Countrywide has dropped more than 80% in 12 months. With doubts that the company will be able to finance itself, Bank of America has a $140 billion balance sheet so it can withstand a lot of pounding and there may be plenty to come.

Countrywide is a target of lawsuits and under scrutiny by regulators.

Talk about their market cap of $4 billion a year ago it was like $ 27 billion. Why would Bank of America do this? They probably want to watch their investment. Bank of America has invested $2 billion already and the value of that investment has declined by $1.3 billion. Statements from the same time show they got the right to match any offer for Countrywide.

Bank of America is the biggest or close to being the biggest in all of the US consumer businesses except for Morgan so by buying Countrywide it could scale up at a discounted price in the mortgage business and reduce Countrywide’s funding costs by about $200 million. Citigroup estimates they pay about a half point more in interest than peers for deposits and Bank of America may be able to cut $400 million in the cost of its own mortgage business.

So huge cost savings for Bank of America in buying Countrywide.

Bank of America IS buying Countrywide Financial for $4 billion in stock. This could be great for Bank of America. This deal makes them all largest mortgage lender and servicer as well and expand their leading share in the US consumer banking industry. At the same time, it removes one of the concerns in the markets, the future of Countrywide.

The chief executive of Bank of America is calling this a rare opportunity to bind. He sees Countrywide as a key part of growth. one reason for the optimism may be that Bank of America does not plan to originate any subprime mortgages and is said to be willing to renegotiate existing mortgages.

Analysis and Discussion with Dick Bove of Punk Zigel: JPMorgan May Make a “Major” Acquisition Soon. JPMorgan May Consider Buying Washington Mutual

What It Takes to Get Deals Done in This Environment. “MAC” Clause - Analysis and Discussion with Louis Bevilacqua of Cadwalader Wickersham & Taft: Getting Deals Done, Reverse Break-Up Fee, Flexible Financing.

ABN Amro Takeover In Jeopardy. Aug. 10, 2007. 06:00 AM EST. Shares of A.B.N. Amro are moving lower on speculation Barclays may withdraw its takeover bid

Radian to Provide Business Update

PHILADELPHIA, Sept. 5 /PRNewswire-FirstCall/ — Radian Group Inc. (NYSE:RDN) announced today that it will provide an update regarding its business strategy and key financial information as an independent company, following its mutual decision with MGIC Investment Corporation (NYSE:MTG) to terminate their merger agreement. Radian has scheduled a conference call with investors for Wednesday, September 5, 2007 at 10:00 am Eastern Time to discuss the Company’s stand-alone plan.
“We have thoroughly reviewed our businesses and are confident that as a stand-alone company we can deliver on our strategic plan to create long-term value for Radian and our stockholders,” said Radian Chief Executive Officer S.A. Ibrahim. “While there are significant credit challenges in today’s mortgage market, we also believe that there are tremendous opportunities for our company in the mortgage insurance and financial guaranty markets, and our management team is moving aggressively to position Radian for future success. We look forward to discussing our plan on this morning’s call.”

MGIC Investment and Radian Group Terminate Merger

MILWAUKEE and PHILADELPHIA, Sept. 5 /PRNewswire-FirstCall/ — MGIC Investment Corporation (NYSE:MTG) and Radian Group Inc. (NYSE:RDN) jointly announced today that they have entered into an agreement that terminates their pending merger. The companies cited as the rationale for doing so their mutual agreement that current market conditions have made combining the companies significantly more challenging. Both MGIC and Radian believe it is in their best interests to remain independent companies at this time. All outstanding litigation between the companies will be withdrawn. Neither party made a payment to the other in connection with the termination.