A subsidiary of MetLife will buy the unit of residential mortgage business of First Horizon National Corp., a deal which includes more than 230 retail and wholesale offices nationwide.
Though terms of the deal between MetLife Bank N.A. and First Tennessee Bank were not disclosed, the acquisition will include all of First Tennessee Banks origination business outside of Tennessee, and servicing assets associated with $20 billion o first lien mortgage loans.
Additionally, First Horizon will continue to originate home loans in the Tennessee area, keeping its 21 mortgage offices and employees there.
MetLife Bank also entered into a sub-servicing agreement for the remainder of First Horizons first lien servicing portfolio, which has an expected total of $65 billion, and is buying mortgage servicing assets on about $20 billion of first lien mortgage loans from First Horizon.
The agreement, expected to close during the third quarter, will not entail MetLife Bank assuming any subprime or Alt-A mortgages. MetLife Bank will pay book value for the assets purchased.
First Horizon also plans to sell up to 90 percent of its mortgage loans in warehouse operations and expects its mortgage banking assets to decline at least $3 billion by the end of the year. It expects to record charges between $50 and $70 million over the remainder of 2008.