Fremont sells real-estate unit for $1.9 billion

Fremont General Corp., whose loans to risky borrowers helped trigger the subprime mortgage crisis, will sell its commercial real-estate unit for $1.9 billion and bring in new managers led by billionaire banker Gerald J. Ford, according to a report in Bloomberg. IStar Financial Inc., a real-estate lending and leasing company, will buy the commercial loan operation. Fremont also will get $80 million by selling a minority stake in the remaining enterprise to investors headed by Ford, who once ran Golden State Bancorp Inc. Shares of Santa Monica, California-based Fremont surged 41 percent. The cash infusion lets Fremont stay in business as a retail bank with 22 branches in California. The Federal Deposit Insurance Corp. told Fremont in March to stop making home loans to unqualified borrowers and said executives didn’t effectively manage risks for mortgages and the commercial loans. Ford’s team helped build Golden State into the second-biggest U.S. thrift with 352 branches until it was sold in 2002 to Citigroup Inc.