So, over on Rain City Guide where I also do some writing there is a hailstorm of commentary going on about my article referencing Eric’s post on Countrywide. Personally, and for my own reasons that can be my own and don’t need to be posted for everyone’s consideration, I am not freaked out by what is happening at Countrywide. In fact, I decided to buy some of their stock instead. But, due to the interesting commentary coming from my post on RCG I thought I’d do some more research and subsequently found this very interesting Reuters story about GreenPoint Mortgage. I can’t stand this company personally because of how I’ve seen them treat consumers throughout the years frequently gouging them at the end of a transaction and at a time where a consumer was most vulnerable to the tactic. For your review below is the Reuters article I found:
ReutersWRAPUP 3-Capital One slashes jobs, mortgage industry swoons
(Adds details in paragraphs 2-3, Capital One CEO comment)
By Dan Wilchins
NEW YORK, Aug 20 (Reuters) – The U.S. mortgage industry took another battering on Monday, as Capital One Financial Corp said it will shut a lending unit it bought less than a year ago, while two mortgage companies took steps to bolster liquidity as losses piled up.
Capital One, best known as a credit card issuer, said it will cut 1,900 jobs and take $860 million in charges as it closes its GreenPoint Mortgage unit, which it acquired last December when it paid $13.2 billion for North Fork Bancorp Inc.
McLean, Virginia-based Capital One plans to close GreenPoint’s headquarters in Novato, California as well as 31 offices in 19 states, and will stop offering mortgages through brokers.
It also cut its 2007 profit forecast to $5.00 per share from $7.15.
“GreenPoint has run into unforeseen challenges that are beyond its control,” Capital One Chief Executive Richard Fairbank said in a memo to employees, adding the closure “is the function of an unprecedented set of market circumstances.”
GreenPoint has specialized in “Alt-A” mortgages, which often go to people who do not qualify for “prime” mortgages or cannot fully document income or assets.
Capital One shares closed down 3 percent at $66.72 on the New York Stock Exchange. They fell an additional 2.4 percent to $65.08 in extended trading after Capital One’s announcement.
