Discover Financial Services (NYSE: DFS) announced today that it has reached a definitive agreement to acquire substantially all of the operating and related assets of Home Loan Center, a subsidiary of Tree.com, Inc. (NASDAQ: TREE) 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.
"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."
Discover's array of banking products include credit cards, personal loans, private student loans, certificates of deposit, savings accounts and Roth individual retirement accounts.
"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."