CIT Drops Mortgage Lending Unit

Commercial and consumer finance company CIT Group announced that it will shut down its mortgage lending operation, and as a result will cut 550 jobs across 25 offices. The company will take a $35 million pretax charge in the coming quarter for severance and exit costs. CIT may have tried to sell the division, but likely found little interest; the business unit catered mostly to the subprime market. Chief Executive Jeffrey Peek commented on the move in a conference call today, saying the business had a "problematic outlook" and the company was not willing to invest more to boost returns. He added mortgages were responsible for 10% of CIT's income. CIT closed down 2% to $36.50 Tuesday. It started the year at $55.77.

Sources: Forbes, Reuters, Bloomberg
Commentary: Best, Worst Performing Stocks Since the Market Top On 7/16 • Colonial Bankshares, CIT Group Change Their Mind on Statement 159
Stocks/ETFs to watch: CIT. Competitors: FIF, C. ETFs: PSP

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