TIAA Bank exiting retail mortgage lending, selling to U.S. Bank

Shifts focus to digital mortgages

Just over 18 months ago, TIAA was finalizing its $2.5 billion acquisition of EverBank, touting the deal as a “significant” expansion of its retail footprint and an extension of its existing retirement, investment and advisory services.

Then, in July 2018, the company rebranded TIAA Direct and EverBank to TIAA Bank. At the time, TIAA President and CEO Roger Ferguson said that the combination of the two operations into one brand name would help the company build a “different kind of bank.”

But now, just a few months later, TIAA Bank is moving to get out of retail mortgage lending and will shift its focus to digital mortgages.

TIAA Bank announced this week that it is undertaking a “strategic realignment” of its mortgage business that will allows the bank to “serve an even wider audience of clients nationwide.”

As part of the “realignment,” TIAA Bank will “transition” out of its retail branch mortgage business and “concentrate on originating home mortgage loans directly, particularly through its existing digital capabilities that provide an exceptional client experience,” the bank said in a statement.

But TIAA Bank isn’t shuttering all of its retail mortgage branches. The bank said that it reached an agreement with U.S. Bank to acquire some of its retail operations.

According to TIAA, U.S. Bank will “extend offers of employment to a number of experienced TIAA Bank staff and assume certain leases on TIAA Bank’s retail home lending offices in key markets across the United States.”

But the bank did not provide details on just how many of its employees will be hired on by U.S. Bank and how many will be laid off. Nor did the bank provide information on which of its branches will become U.S. Bank operations.

Whichever branches are not included in the deal will be closed as TIAA Bank says that it will exit the remainder of its retail branch mortgage operation and focus on its existing retail-direct and correspondent lending businesses moving forward.

“This repositioning will allow us to serve a wider audience of clients nationwide, including millions of TIAA participants and their families, through our retail direct and correspondent lending channels,” said Blake Wilson, chairman and chief executive officer of TIAA Bank.

“We understand that borrowers today need fast, convenient and cost-effective solutions,” Wilson added. “The changes we’re making will enable us to deliver mortgage solutions to even more people, using digital technologies that enable clients to work with us efficiently and easily, anywhere and at any time.”

As Wilson said, the bank plans to lean on its digital mortgage platform in the future, which the bank previously touted when it rebranded last year.

As for U.S. Bank, the company said that it views this deal as opportunity to expand its mortgage business and add quality employees to its team.

“We are always looking for opportunities to add experienced and talented people to our staff,” U.S. Bank Senior Vice President and Head of Enterprise Communications Rebekah Fawcett said in a statement provided to HousingWire. “Coupled with our digital offerings, this extension of our retail branch mortgage service will be a benefit for our customers in key markets across the United States.”

TIAA Bank said that clients with pending mortgages or applications will not affected by the change, nor will the bank’s mortgage servicing customers.

Financial terms of the deal were not disclosed. Additionally, neither company provided a timeline for when the deal will be official.

TIAA’s shift away from retail lending is the second time a bank has much such a move in less than a week.

Last week, HomeStreet Bank announced that it is planning to sell off its entire retail mortgage operation, which includes 72 home loan centers in five states, as well as nearly all of the mortgage servicing rights associated with loans originated in those retail outlets.

And those two will likely not be last companies to sell off their mortgage businesses as the industry deals with lower originations thanks to higher mortgage interest rates.

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