A consumer finance lender formerly owned by American International Group Inc. is unloading a billion dollars in mortgages.
American General Financial Services operated as a subsidiary of AIG until 2010, when Fortress Investment Group LLC took an 80 percent stake in the company.
The unit subsequently changed its name to Springleaf Financial Services and conducted an initial public offering in 2013.
In its fourth-quarter earnings report, the Evansville, Ind.-based company reported that it has reached an agreement to sell around $1.0 billion in legacy mortgage receivables.
All of the loans are serviced by PennyMac.
On the other side of the sale are three different unidentified parties.
The deal is expected to close by the end of this month.
Springleaf expects to generate a $55 million gain from the transaction.
“This transaction reflects an acceleration of the liquidation of the legacy mortgage portfolio through continued organic runoff and opportunistic sales,” the report stated.
A fourth-quarter pre-tax loss of $83 million was recorded for legacy real estate and other non-core activities.
Springleaf President and Chief Executive Officer Jay Levine noted in the announcement that the company “will continue to consider opportunistic sales of additional portions of the portfolio as market conditions allow.”
