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Mortgage Companies Going Belly-Up

by M. Anthony Carr

GreenPoint Mortgage Funding is the latest mortgage company to shut its doors this year. Credit card giant CapitalOne, headquartered in the shadow of Washington, D.C., announced the immediate shutdown of GreenPoint, its loan origination subsidiary. Talk about a good idea gone bad -- CapitalOne just bought the company December of last year.

I like the way the CapitalOne press guys write this one up -- that the current market creates "significant near-term profitability challenges." I guess that means, we ain't makin' no money right now.

Note to shareholders: Oops.

One of the latest twists in an already topsy-turvy real estate market for agents and buyers is this -- if a mortgage company owns a lot of property from foreclosures, then where or to whom does a buyer make an offer to purchase such property since the holder of the house no longer exists -- at least in a healthy state.

The short-sale market (better known as pre-foreclosure) is alive and well around the country. But now we have the next challenge on these properties -- buyers in the midst of a transaction with an entity whose status is questionable at best, and totally phased out at worst.

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Capital One Shuts Down GreenPoint Mortgage Unit

Mortgage meltdown claims another victim

08/21/2007 | Martin H.Bosworth | ConsumerAffairs.com

The mortgage meltdown has claimed yet another casualty, as Capital One announced it is shuttering its GreenPoint Mortgage wholesale lending unit. GreenPoint will close all 31 of its branches in 19 states, and its headquarters in California, Capital One said.

The McLean, Virginia-based lender also announced it was cutting 1,900 jobs across the board in an effort to cut costs. Capital One had already announced its plans to cut 2,000 jobs earlier in the year.

Capital One bought GreenPoint Mortgage for $13.2 billion in 2006, at the tail end of a five-year housing boom that saw record home prices and loans across the country. The closing of the unit will cost Capital One $860 million after taxes, according to the company.

Although Wall Street was expecting better trading today due to positive reports from retailers, the financial markets still showed nervousness in the face of another example of the mortgage meltdown's ripple effect across the global economy.

Lenders who specialized in "creative" and "nonconforming" loans with higher interest rates and steep payment increases have been downsizing or declaring bankruptcy in droves, leading to a global "credit crunch" as the markets pull back from lending and consumers stop borrowing.

Bloguero culpa a HGTV por la burbuja inmobiliaria

Tuesday, August 21, 2007

I Blame HGTV

I've just finished doing the research and substantive edit of a book designed to help newlyweds through the process of buying a home. The author, a fan of sub-prime mortgages in SOME cases, does ask readers to do some major work before jumping in: make a budget and then stick to it for a few months, instead of just assuming that you will; don't have a mortgage bigger than what you are already paying in rent (providing you're meeting your rent payments without a problem); remember that happiness is not dependent on glass-tiled bathrooms withsoaker tubs, etc. Basically, reminding people to stay sane.


Sanity has been hard to come by in real estate for the last few years. The early adapters to bubble housing prices and the rise of HGTV made a fortune. Soon, everyone felt that they should be in on it. If you weren't buying, upgrading, or flipping you were an idiot, doomed to a life as a wage slave. Turn on any one of half a dozen TV channels and you could watch 22 year old waiters and 40 something housewives leverage the finances to buy a wreck and then, a few setbacks and many visits to Home Depot later, reveal the newly gleaming home and their expected profit margin--usually about as much as most people make in a year or two.


Continua aquí: http://awedacity.blogspot.com/2007/08/i-blame-hgtv.html

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Greenpoint Mortgage Closed

Colin Robertson August 20, 2007 Comments Off

Greenpoint Mortgage was shut down today by parent Capital One Financial Corp., who said weak demand for residential home loans forced the company to shut the ailing mortgage lender. Capital One announced that it would cease loan origination operations at Greenpoint Mortgage immediately, and according to initial reports, cut roughly 1,900 jobs.

Loans that are already in the pipeline and locked will continue to be processed and should ultimately fund as scheduled.

The news followed similar statements made by the VP of investor relations for Capital One last week, who sparked employee concerns that the company was gearing up to close Greenpoint Mortgage. Greenpoint Mortgage headquarters in Novato, California will be closed, along with 31 other branches in 19 states throughout the United States.

Greenpoint Mortgage specialized in Alt-A loans, offering programs for borrowers with credit scores down to 620, as well as option-arms, second mortgages, jumbo loans, and other high-risk products. But earlier this year Greenpoint narrowed their product offerings significantly, effectively sinking loan volume and forcing the closure of 13 branches and 440 layoffs.

Capital One Closes GreenPoint Mortgage, Idling 1,900

By Joseph N. DiStefano - August 20, 2007 20:22 EDT

Aug. 20 (Bloomberg) -- Capital One Financial Corp. shut its GreenPoint Mortgage unit, eliminating 1,900 jobs, and lowered its earnings forecast as the worst U.S. housing slump in 16 years erodes demand for home loans.

Capital One bought GreenPoint less than a year ago in a $13.2 billion deal that was the biggest acquisition to date for Chief Executive Officer Richard Fairbank. Today, the McLean, Virginia-based bank cut its 2007 earnings forecast to $5 a share from $7.15, triggering charges of about $860 million, or $2.15 per share, mostly during this year.

"They said, 'Let's just cut our losses now and get out," said Thomas Brown, chief executive officer at Second Curve Capital LLC in New York, which owned 1 million shares of Capital One on June 30. "The company had been getting a lot of questions about that business."

Capital One acquired GreenPoint's parent, North Fork Bancorp, at the tail end of a five-year boom in home sales. The real estate market nationwide has contracted and investors have shunned mortgage-backed securities since defaults on loans to home buyers with poor credit rose to a record earlier this year. More than 90 mortgage companies have closed operations or sought buyers since the start of 2006, according to Bloomberg data.