Discover will close mortgage unit it bought in 2012, saying it didn't meet expectations

NEW YORK, N.Y. – Discover Financial Services says it will close its home lending business and will eliminate 460 jobs, or about 3 per cent of its workforce.

Discover says the business isn’t meeting its financial expectations and it wants to focus on its banking services, which are more profitable. It will continue to offer home equity loans through Discover Bank.

The Riverwoods, Illinois-based company bought the home lending business from Inc. in 2012, paying $55.9 million.

Discover says its Irvine, California, office will stop accepting mortgage applications Tuesday. An office in Louisville, Kentucky, will keep accepting applications until July 31. It says AmeriSave Mortgage will start processing applications to that office in August, and AmeriSave will also offer jobs to about 125 Discover employees.

As of Jan. 31, Discover had 14,676 employees.

Its shares slipped 16 cents to close at $58.06 on Tuesday.