Capital One Gets Out

Capital One has announced that it's getting out of the wholesale mortgage business. They'll lay off some 1900 people over the course of the year as they shut down GreenPoint Mortgage's main office in CA along with 31 other offices. GreenPoint's home page states that the company will honor current rate locks on loans that are "in the pipeline," but no new loans will be made.
There was a note about a related press release on the Capital One website and a link to it. However, when I went there, I was unable to locate the press release, and a search within the site for "GreenPoint" brought up no results. I did find several links to positive articles and press releases, the first one ironically noting that Fortune Magazine had declared Capital One among the top 100 companies to work for. On the other hand, this will probably remain true for those who continue to be employed with them.

The reason for Capital One's decision is that it has become less profitable to sell their loans on the secondary market. There isn't enough money in making loans to keep companies going--they have to be able to package and sell them to someone else. Those investors, however, are nervous after increasing defaults has left them with foreclosed houses and a glut of houses for sale. What this means for real estate, of course, is one less source of loans for anyone who might want to buy and thus fewer able buyers for properties that are sitting on the maket.

For a MarketWatch article, click on the following link:
Article on Capital One