Private equity firm Lone Star Funds is building itself a mortgage lending and servicing empire amid a historic industry downturn -- and on Tuesday morning, the company added to its growing portfolio, snapping up the home lending business of commercial finance giant CIT Group Inc. (CIT). CIT sold its mortgage business for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities, it said in a press statement. The sale also includes the company's servicing operations in New Jersey and Oklahoma, which employ approximately 300 people. Lone Star had not commented on the purchase, or its plans for the newly acquired lending and servicing platform, by the time this story was published Tuesday morning. The private equity firm recently bought Bear Stearns Residential Mortgage Corporation from Bear Stearns & Cos., before the Wall Street firm was itself acquired by JPMorgan Chase & Co. (JPM) at the end of May; Lone Star also owns the origination and servicing platform tied to former subprime giant Accredited Home Lenders, Inc. Sources suggested to HW that Lone Star would look to consolidate CIT's platform with those it already owns, citing the private equity firm's decision to install former Bear Res CEO Jeff Walton at the helm Accredited within days of acquiring the Bear Res mortgage platform. CIT also said it had agreed to sell its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million -- effectively pushing the commercial finance company out of mortgages and home loan servicing altogether. "These sales complete our exit from all home lending businesses, removing the uncertainty surrounding this asset class, and advances our strategic transformation into a company focused entirely on commercial finance," said Jeffrey M. Peek, chairman and CEO at CIT. CIT said it would take a pretax charge of $2.5 billion tied to the sale -- $2.2 billion coming as loss on sale in its second quarter earnings. While transfer of lending portfolios should be completed by the end of this month, the transfer of the company's substantial servicing platform will take until the first quarter of 2009 to complete. Disclosure: The author held no positions in the publicly-traded firms mentioned in this story when it was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.