Discover Financial Services has announced that it has reached an agreement to acquire substantially all of the operating and related assets of Home Loan Center, a subsidiary of Tree.com Inc. for approximately $55.9 million, adding a residential mortgage component to Discover’s direct-to-consumer banking business. Discover intends to originate eligible consumer mortgages to sell in secondary markets on a servicing-released basis. The company anticipates that the acquisition will have a nominal impact on its 2012 earnings. Home Loan Center, which operates as LendingTree Loans, originates and processes consumer mortgage loans nationwide.
"The Home Loan Center platform, with its outstanding team and operational excellence, is a great fit for Discover," said Doug Lebda, chairman and chief executive officer of Tree.com. "This deal will enable Tree.com to focus on our core lead generation business."
The acquisition is subject to the approvals of regulators and Tree.com Inc. stockholders and is expected to close by the end of 2011.
“Discover is acquiring a proven operating platform that we can scale by leveraging our brand and lending expertise,” said Carlos Minetti, president of consumer banking and operations for Discover. “This will enable us to expand our line of banking products and provide home loans to consumers.”