January 10, 2012 / 9:49 PM / 7 years ago

MetLife says exits forward mortgage business

BOSTON (Reuters) - MetLife will shut down its mortgage operations, the largest U.S. life insurer said on Tuesday, giving up on the unit three months after it said it would seek a buyer.

MetLife has been trying to shed assets like its bank and mortgage operations in order to reduce regulatory scrutiny and focus its operations on insurance and annuities. Last year the Federal Reserve blocked the company from raising its dividend, and most analysts expect it will soon face additional regulatory oversight as a “systemically important” financial firm.

In a statement, MetLife said it would no longer accept new applications for forward mortgages, but would honor all commitments for loans in process. MetLife said it would continue with its reverse mortgage business.

The company forecast up to $110 million in after-tax costs over the next year for the closure but said there would be no impact on operating earnings.

The shutdown of the mortgage business follows the late-December deal to sell its retail banking operations to a unit of General Electric (GE.N). The retail banking business represented less than 2 percent of the company’s operating earnings.

Reporting By Ben Berkowitz. Editing by Gunna Dickson

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