Just three months after proclaiming that it plans to stay in the mortgage business, MetLife Inc. has had a change of heart. The company also confirmed its plans for the reverse mortgage business.
When it disclosed in July its decision to sell MetLife Bank, N.A., parent MetLife Inc. said it planned to keep the mortgage business.
“MetLife plans to continue to offer residential mortgages through its MetLife Home Loans business,” the statement from the New York-based firm said.
But the life insurer has since changed its strategy.
“In addition to its previously announced decision to explore a sale of MetLife Bank, N.A.’s depository business, the company will now also explore a sale of the bank’s forward mortgage business,” MetLife said in a news release Wednesday.
Loan originations will continue uninterrupted while a buyer is sought.
The company explained that profitably operating a mortgage business in today’s “uncertain marketplace and regulatory environment” requires significant capital resources and human resources.
But committing such resources to residential lending diverts resources from its primary focus: its global insurance and employee benefits businesses.
The company, however, will maintain its reverse mortgage origination operations, according to a spokesman.
He explained that the reverse mortgage business has different operating and capital characteristics than the traditional forward mortgage business.
But the spokesman added, “as a public company, we continuously evaluate all of our businesses based on market conditions and the regulatory environment.”
MetLife entered the reverse mortgage business with its June 2008 acquisition of EverBank LLC. It’s foray into real estate finance expanded three months later when it acquired mortgage production offices from First Horizon National Corp.
MetLife, which regularly ranks among the top 15 residential lenders in the country, closed $22.1 billion in mortgages last year. During the first half of 2011, production totaled $8.9 billion.
As of the end of June, 5,156 people were employed in MetLife’s mortgage businesses.
In today’s announcement, MetLife highlighted how eliminating the regulation associated with owning a bank will put it on the same regulatory footing as competing insurance companies.