Insurance giant MetLife, Inc. Tuesday afternoon shocked the market, saying it would exit the business of producing new “forward” residential loans through its residential lending division, MetLife Home Loans.
Among funders, MLHL ranks 10th nationwide.
As reported by National Mortgage News, MLHL has been on the auction block with a handful of bidders including American Home Mortgage Servicing Inc., EverBank, and PNC Bank eyeing certain production units and/or branches.
Investment bankers and other advisors say none of these bidders wanted to pay up for MLHL's origination arm. Some of these suitors have already entered into talks with branch managers and LOs of MLHL's top producing offices.
In a statement the insurer said “MetLife Home Loans, the residential mortgage division of MetLife Bank, N.A., will no longer accept new loan applications for forward mortgages. MetLife Home Loans continues to originate reverse mortgages.”
It added: “MetLife Home Loans will honor all contractual commitments for loans in process and expects the majority of loans to close in 90 days.”
But MLHL will continue to service its $84 billion servicing portfolio, though the insurer likely will attempt to sell that asset as well.
At press time, the future of MetLife's warehouse lending division was unclear. Sources told NMN that the insurer may keep that business. Early Tuesday a bank spokesman declined to comment on the warehouse unit.
MetLife expects $90 to $110 million, after tax, in costs related to exiting the business to be incurred over the next year, with no expected impact on the company's operating earnings.
In late December MetLife announced that GE Capital Financial Inc. had agreed to acquire most of MetLife Bank's depository business, including certificates of deposit and money market accounts.
