Insurance giant MetLife (MET) closed its forward home loan business Tuesday, but will continue to originate reverse mortgages.
The company had been trying to sell the division since October due to what it thought were excessive regulations post-banking crisis. The company was able to unload MetLife Bank, its depository arm, in December to GE Capital Financial, a subsidiary of General Electric (GE). But it found no buyer for the mortgage business.
MetLife said it expects the closing to cost between $90 million and $110 million after taxes. It does not expect the closing to impact its earnings.
Effective immediately, Irving, Texas-based MetLife Home Loans will no longer accept new mortgage applications. The company expects those already in the process to close within 90 days. Forward mortgages represented less than 2% of MetLife’s operating earnings in the first three quarters of last year.
A company spokesman said a majority of the 4,300 employees, of which 1,500 are sales associates, at the forward mortgage business will be let go. A number of the workers will stay on to help with the transition.
It was the 13th largest mortgage originator in the country in 2010, writing more than $22 billion in home loans, according to Inside Mortgage Finance. It was also the 11th largest servicer that year, handling more than $115.9 billion in mortgages at the end of 2010.
The company became the largest originator of reverse mortgages after Wells Fargo (WFC) and Bank of America (BAC) left the business last year.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
