Rewards card specialist Discover Financial Services, which got into the mortgage business via an acquisition in 2012, is shutting down its struggling home-lending business and laying off 460 employees, many of them in Irvine.
The Riverwoods, Ill., company announced Tuesday that it would focus instead on a division offering consumer banking services, which it said is profitable and offers "greater opportunities for growth."
"The [mortgage] business is not projected to meet our financial expectations," said Carlos Minetti, Discover's president of consumer banking, "so we made the difficult decision to exit."
Discover bought the mortgage operation three years ago from Charlotte, N.C.-based Tree.com.
The Irvine location has stopped accepting applications, the company said, although it was to continue processing and funding loans already in process.
Discover said it plans to offer severance packages to affected employees. Three hundred and ninety work in Irvine, with the rest in Kentucky.
The company said the home lending unit, Discover Home Loans Inc., would wind down business at its Louisville, Ky., offices in August.
Atlanta-based AmeriSave Mortgage Corp. is expected to finish processing those applications, and plans to establish a Louisville office and offer jobs to about 125 Discover employees.
The company said it would continue to originate home equity loans through Discover Bank.