June 16--Discover Financial Services said Tuesday that it will close the home mortgage business the company acquired in 2012.
Just three years ago, the mortgage business was a key part of Discover's strategy to move beyond credit cards into more broad-based consumer lending. The company acquired LendingTree Loans for about $56 million.
But the residential mortgage business proved a tough nut to crack.
"The business is not projected to meet our financial expectations due to ongoing challenges to our home loans operating model, so we made the difficult decision to exit," Carlos Minetti, president of consumer banking for Discover, said in a statement.
The Riverwoods-based company said it will take a charge against earnings of about 4 cents a share to exit the business. It will also lay off about 460 employees in Louisville, Ky., and Irvine, Calif.
Discover will continue accepting loan applications at its Louisville offices through July 31, after which AmeriSave Mortgage will finish processing the remaining applications. AmeriSave plans to offer jobs to 125 Discover employees. The Irvine location stopped accepting new applications as of Tuesday.
asachdev@tribpub.com
