MetLife Inc. (MET), the largest U.S. life insurer, said Tuesday it's shutting down its business of originating residential mortgages, three months after it said it would seek a buyer for the unit as part of an effort to boost shareholder returns.
MetLife Home Loans, the residential mortgage division of MetLife Bank, will no longer accept new loan applications for forward mortgages, but will honor all commitments for loans in process, the company said.
The insurer expects $90 million to $110 million in after-tax costs related to exiting the business to be incurred over the next year, with no expected impact on the company's operating earnings.
Goldman Sachs, anticipating the move, on Monday upgraded MetLife to "buy."
MetLife has been trying to reduce regulatory oversight by shedding assets like bank and mortgage operations. The company is subject to regulatory scrutiny because it's "systematically important." In October, the Federal Reserve rejected MetLife's proposal to raise its dividend and resume share buybacks.
On Dec. 27, MetLife announced that GE Capital Financial Inc. had agreed to acquire most of MetLife Bank's depository business, including certificates of deposit and money market accounts.
MetLife said its retail banking business, including mortgages, represented less than 2 percent of its 2011 operating earnings as of Sept. 30.
MetLife closed up 3.88 percent, or $1.29, to $34.55 Tuesday.