MetLife Inc., the largest U.S. life insurer, said it will shut its home mortgage-origination operation, costing the company at least $90 million and most of the 4,300 employees at the unit their jobs.
“The majority will no longer have a position,” said John Calagna, a spokesman for New York-based MetLife, in an interview Tuesday. Most of the workers at the business are based in Irving, Texas, Calagna said.
MetLife said in October it was seeking a buyer for its mortgage unit after announcing plans to sell deposit-gathering operations to reduce federal oversight. The firm reached a deal last month to sell about $7.5 billion of its bank’s deposits to General Electric Co. The Federal Reserve, which oversees MetLife because of its size and banking operations, rejected its plan last year to raise the dividend and resume share buybacks.
“It’s hard to sell a banking business right now, especially a mortgage business, given all of the potential pitfalls” tied to regulation, said Dan Theriault, an analyst at Portales Partners LLC who has a “hold” rating on the company. “They said they had two options, they could sell the bank or wind it down, and they’re doing a combination of the two.”
MetLife rose 3.9 percent to $34.55 in New York trading. The company has gained 11 percent since Dec. 31 after falling 30 percent last year.
The insurer said affected employees include salespeople and support staff. The company hasn’t begun dismissals and will give employees 60 days notice, Calagna said. Workers can apply for other positions within the company, he said.
MetLife will continue to service current home-loan clients and to offer reverse mortgages, the company said Tuesday. The wind-down may cost as much as $110 million, according to the statement.
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