Fremont General Corp., a financial-services provider, announced Thursday that Ronald Nicholas Jr. will replace Patrick Lamb as CFO, and will also take on the roles of chief accounting officer, senior vice president, and treasurer. Lamb resigned on Monday, saying he had accepted an offer at another company.
The shakeup comes as Fremont has seen its share price fall by 33 percent in the past year — largely the result of the crash in the subprime mortgage market — and as Moody’s, the ratings agency, lowered its rating on the company as part of an overall downgrade on subprime bonds.
In March Fremont announced it would sell its subprime real estate lending business. That decision came days after the company received a “cease and desist” order from the Federal Deposit Insurance Corp. (FDIC) seeking to limit its subprime mortgage lending.
The following month, the California-based firm sold $2.9 billion of subprime mortgages to iStar Financial, a finance company, and announced plans to sell its loan servicing and loan origination business. It will remain active in commercial real estate and focus on its banking division, Fremont Investment and Loan.
Looking to rebound, Fremont announced in May that Gerald J. Ford, who has a reputation as a turnaround specialist, bought a 20 percent stake in the company. He will become chairman of the board.
Fremont’s woes have not been restricted to the markets. The Massachusetts Attorney General recently announced his intent to bring an enforcement action against the company over concerns that its lending practices violated the state’s Consumer Protection Act.
On Wednesday Fremont agreed to stop foreclosures on more than 2,000 loans originated in the state during a 90-day review period.