The news first appeared in a Reddit thread last week and then in Home Equity Lending News on July 1. That thread noted the company already notified affected employees of the decision to close the business known as Discover Home Loans.

"We conducted an extensive strategic business review of Discover's home loan business to better understand its position and potential as part of Capital One's business portfolio," a statement from a spokesperson said.

"Last week we announced the difficult decision to exit Discover's home loan business. We are focused on supporting our customers and associates through this transition," the statement continued.

Capital One is expected to wind down the in-process pipeline and continue to service the existing loans. It apparently is looking at strategic options for the servicing portfolio going forward.

The transaction closed on May 18 following a prolonged period of regulatory scrutiny and opposition from some members of Congress, including Sen. Elizabeth Warren, D-Mass.

Discover's home equity lending business is all that remained from a failed attempt by the credit card provider to enter the first-mortgage business.

In June 2012, it purchased Lendingtree Loans, a company also known as Home Loan Center. But three years later, it threw in the towel, selling the first mortgage operations to Amerisave Mortgage and the call center to the company now known as Rate.

At the time, Discover said it would continue to originate home equity loans through its commercial bank unit.