CIT Group Inc. has abandoned the mortgage lending business. More than 500 employees were affected by the move.
The New York-based company announced today it would take a $35 million third quarter charge in connection with severance and other costs to exit its home lending origination operations.
The move has resulted in 550 job cuts in 25 U.S. offices, spokeswoman Mary Flynn confirmed to MortgageDaily.com.
A mortgage servicing unit is unaffected by the move, according to the parent of CIT Home Lending.
CIT reported its managed residential portfolio ended the second quarter at $11.9 billion, with 6.60 percent of the loans delinquent at least 60 days.
In a July statement, CIT said it took a $765 million pretax charge in the second quarter in connection with the planned sale of the unit. But today's announcement indicates there were no takers.
"All CIT's businesses must meet rigorous return standards," Chairman and Chief Executive Officer Jeffrey M. Peek said in the July announcement. "As a result, we decided to exit home lending and construction enabling us to redeploy resources to higher returning businesses."