Fremont dumps bad loans

Fremont General is taking an important step this morning in an effort to stay in business: It's unloading its lousy subprime loans. The Santa Monica-based insurer, through its Fremont Investment & Loan unit, has agreements to sell at a discount about $4 billion of its subprime loans. The sale will result in a pretax loss of about $140 million, but at least it brings in much-need cash - about $950 million so far, and more to come. No buyers were named. It's worth noting that Fremont does more than subprime loans; it has a commercial real estate lending operation and a retail banking division, and both had been doing well. Fremont, which has given layoff notices to the 2,400 employees in the subprime lending unit, intends to leave the residential loan business. Fremont stock is up a lot this morning. Reuters