Hedge fund said to buy mortgages from Fremont

Hedge fund giant Fortress Investment Group is buying sub-prime mortgages from Fremont General Corp. of Santa Monica, which halted its home-lending business this month under pressure from federal regulators, people in the market said Thursday.

Fremont said Wednesday that it agreed to sell about $4 billion of loans at a discount, leading to a pretax loss of about $140 million, but did not disclose the buyer. The projected loss means the company is selling the loans for 97 cents on the dollar, analysts have said.

One private equity fund manager who also buys mortgage loans and has done deals previously with Fortress said the most likely buyer of Fremont’s loans was Nationstar Mortgage, which Fortress bought from Centex Corp. last year for $575 million.

Fortress and Fremont declined to comment.