This is no surprise. The deal was supposed to happen months ago. PHH's vehicle fleet-management unit is based north of Baltimore. PHH Chairman Buzzy Krongard, who worked for George Tenet at the CIA, has had a busy 2007. First the publicity over his would-be affiliation with Blackwater USA and whether he told his brother, Cookie, who was inspector general for the State Department, about the link. Then questions about the destruction of CIA interrogation videotapes (done after Krongard had left, but he is talking about it on the record). And PHH. From Bloomberg:

PHH Corp., the New Jersey-based mortgage and vehicle leasing company, scrapped its $1.8 billion sale to General Electric Co. and Blackstone Group LP because Blackstone failed to get financing for the transaction.

GE agreed on March 15 to buy PHH, sell the mortgage division to New York-based Blackstone and keep the vehicle- leasing unit. The acquisition price was $31.50 a share. PHH said Sept. 17 that JPMorgan Chase & Co. and Lehman Brothers Holdings Inc. told Blackstone they may fall $750 million short in funding the private equity firm's part of the deal.

Blackstone ``was not able to obtain the requisite debt financing,'' PHH said today in a Business Wire statement. ``The board will determine in due course whether to continue to explore the company's strategic alternatives.''

PHH said it asked for $50 million from Blackstone as a termination fee, in terms of the agreement. GE, which is based in Fairfield, Connecticut, was to make the acquisition of the vehicle-leasing unit through its commercial finance division.

PHH, based in the Philadelphia suburb of Mount Laurel, New Jersey, has provided mortgages and related services such as billing for other companies to offer under their own brands, including American Express Co. and Charles Schwab Corp.

``There can be no assurance that any further exploration of strategic alternatives that the board may determine to undertake will result in any agreements or transactions,'' PHH said in its statement today.