Fremont General Corporation (NYSE:FMT) said early Monday that its subprime mortgage lending operation, Fremont Investment & Loan, will sell approximately $2.9 billion of its sub-prime residential real estate loans. The company also said in a press statement that it has entered into exclusive negotiations with the same institution under an executed letter of intent to sell most of its residential real estate business and assets, although it did not identify the possible purchaser. Calls to the company seeking clarification were not returned prior to HW publishing this story. Fremont said the $2.9 billion represents the majority of its subprime residential loans held for sale that have not yet been sold, which will be sold at a discount to reflect current market conditions. The company did not specify what the sale amount would be for the loans, although it said that the whole loan sale will result in a pre-tax loss on sale of approximately $100 million. Under the executed letter of intent, the as-of-yet unidentified buyer would obtain Fremont's sub-prime residential loan servicing platform, as well as a portion of the its subprime loan origination platform. As of the time HW published this story, details regarding which portion of Fremont's origination platform were to be acquired were not available. In addition, Fremont said it will sell to the buyer all of its mortgage servicing rights, servicing advances, residual interests, and mortgage-backed securities. The buyer also would assume certain leases, furniture and fixtures, equipment and software associated with the business. Fremont Investment & Loan's liquidity position remains strong, according to Fremont General, as it currently has approximately $1.5 billion in cash and short-term investments. In addition, the company is currently in discussions with several firms as it seeks to select a new independent registered public accounting firm. Former Fremont auditor Grant Thornton LLP resigned on April 2, citing the company's unwillingness to cooperate with an expanded audit of financial records. Sources suggested to HW at the time that the auditor was exploring the company's pricing and valuation strategies for loans held for sale.