Discover Financial Services (DFS) is closing its mortgage origination business, Discover Home Loans, saying that the business is not projected to meet the company’s financial expectations.
In a release, Discover said that it intends to focus on its “profitable banking products” instead, citing greater opportunities for growth in its other business lines.
“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," said Carlos Minetti, president of consumer banking for Discover.
Discover Home Loans will continue to accept mortgage applications at its Louisville, Ken., offices through July 31, the company said.
Business operations will continue at the Louisville office until early August, when Atlanta-based AmeriSave Mortgage Corporation is expected to finish processing the remaining applications, Discover said.
According to a release from Discover, AmeriSave will establish an office in Louisville and offer jobs to approximately 125 Discover employees.
Discover’s Irvine, Calif., location will stop accepting applications immediately and will continue processing and funding loans already in process, the company said.
Discover said that it plans to offer severance packages to about 460 home loan employees, primarily in Irvine and Louisville.
Discover entered the mortgage business in 2012, when it bought Home Loan Center, which operates as LendingTree Loans for $55.9 million.
Discover will continue to originate home equity loans through Discover Bank, the company said.