Discover Launches Mortgage Business in Continued Expansion

Date : 06/12/2012 @ 8:15AM
Source : Dow Jones News
Stock : Lendingtree, Inc. (MM) (TREE)
Quote : 131.2  2.2 (1.71%) @ 7:59PM

Discover Launches Mortgage Business in Continued Expansion

Department 56 (NYSE:DFS)
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   By Kristin Jones 
 

Discover Financial Services (DFS) launched its home-loan origination business as the lender continues its push beyond credit cards.

Discover first disclosed its plans last year to originate mortgages when it said that it was buying assets from Tree.com Inc. (TREE), an online lending program. Discover, best known for its credit cards, had laid out plans to originate mortgages that conform to Freddie Mac (FMCC) and Fannie Mae (FNMA) standards and sell the loans in the secondary market.

In March, the company said it planned to launch its online mortgage business by mid-year.

"Home loans are a product our customers have been asking for, and our approach offers the simplicity, transparency and personalized service for which Discover is known," Carlos Minetti, president of consumer banking and operations, said on Tuesday.

The company will offer prime variable- and fixed-rate loans, and web access to documents and loan status will be provided on www.discoverhomeloans.com.

The move into mortgages is in line with the lender's moves to diversify its business, which is heavily dependent on credit-card loans. Discover has also begun offering private student loans and personal loans.

Discover has also pushed to become a full-service online bank, with a wide array of financial products.

Shares closed Monday at $32.40 and were inactive premarket. The stock is up 35% so far this year.

Write to Kristin Jones at kristin.jones@dowjones.com




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