Luminate Home Loans to close NEO division

Minneapolis-based mortgage lender Luminate Home Loans has decided to shutter its NEO Home Loans division, which transitioned to the firm two years ago, the company announced on Friday. The expectation is that NEO will close by the end of February 2025. 

According to Luminate, the decision reflects, among other things, its “focus on integrating mortgage lending into its core banking services to better serve clients and build long-term financial relationships.” The mortgage firm, which has been in business since 1998, is a subsidiary of Luminate Bank. 

The company said it’s working with affected employees and will provide opportunities to transition to other roles within the organization.

Luminate announced in December 2022 that it would transition the Neo Home Loans team, which had more than 200 members, to its structure. The team was previously part of Celebrity Home Loans. 

“We made the decision to close the NEO Division to align with our long-term business strategy,” Taryn Reuter, CEO and chairman of Luminate, said in a statement. “Our focus now is on ensuring a smooth transition while continuing to provide outstanding service and expanding our platform.” 

The lender says it has 84 branches and more than 500 loan originators nationwide, providing financial solutions in 49 states. 

Inside Mortgage Finance shows Luminate Bank originated $1.26 billion in mortgages in the first half of 2024, up 4% year over year. Meanwhile, data from mortgage tech platform Modex shows that most of the company’s origination this year has been conventional (71%) and purchase (76%) loans.

“The partnership between Luminate Home Loans and Luminate Bank is the spark that ignites our nationwide expansion, accelerating our growth across the United States,” Reuter added.