Discover To Close Mortgage Origination Business, Cut 460 Jobs

(RTTNews) - Discover Financial Services (DFS) on Tuesday said it is closing the mortgage origination business it acquired in 2012 to focus on its profitable direct banking products for which it sees greater opportunities for growth.

As a result of the closure, Discover plans to offer severance packages to about 460 employees, primarily in Irvine, and Louisville.

Charges related to exiting the business are expected to be about $0.04 per share, the company said.

"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 Inc would accept applications at its Louisville, Ken., offices through July 31. Business operations will continue there until early August, when Atlanta-based AmeriSave Mortgage Corp is expected to finish processing the remaining applications. AmeriSave plans to establish an office in Louisville and offer jobs to about 125 Discover employees.

At Discover's Irvine, Calif., location, the business will stop accepting applications as of today and will continue processing and funding loans already in process.

Discover said it would continue to originate home equity loans through Discover Bank.