Capital One Bank - say buh bye!
 

NEW YORK (Reuters) - Capital One Financial Corp (COF.N: Quote, Profile , Research) on Monday said it will eliminate 1,900 jobs and shut down a wholesale mortgage unit it acquired less than a year ago, as it struggles with the U.S. housing downturn.

The closure of GreenPoint Mortgage Inc. will result in an $860 million charge, or $2.15 per share, and Capital One slashed its 2007 earnings forecast. Shares fell in after-market trading but then rose as investors cheered the company's exit from an increasingly risky business.

"There's some short-term pain. You never want to have to write down assets. But it's a long-term positive, because this operation was one of the main concerns facing the company," said Peter Kovalski, analyst covering financial services stocks at Alpine Woods Capital Investors, which owns Capital One shares.


McLean, Virginia-based Capital One, best known as a credit card issuer, is the latest lender to get hit by the U.S. mortgage crisis, where rising defaults by borrowers have made investors less willing to buy repackaged home loans.

Capital One plans to close GreenPoint's headquarters in Novato, California, and shut 31 offices in 19 U.S. states. It expects to take most of the charge for the closure in 2007.

"GreenPoint has run into unforeseen circumstances that are beyond its control," said Richard Fairbank, chairman and chief executive at Capital One

dayum....whats going on??? buyers market yet....

They will recover.

However I am still investing heavy into my local banks stocks which are at a near all time low. Despite that they are a very strict prime lender only. Somehow they got lumped in with the other banks who gave out mortgages.

So what just happened to everyone with mortgages therough greenpoint? they just get a free ride?

They will be sold off for less than face value. Just like all bad debt.

Hopefully that'll cut my junk mail in half.

Capital One won't go away, just their division that was giving away crap loans.

Right now there is a stampede to get out of financials when the reality is that most of them are still in a good place. Only a few companies were handing out loans to anyone with a heartbeat and are going to totally fold.

Biggest problem that is hitting us is that in the panic, no one is lending any money to anyone. So the economy is grinding to a stop. This will actually be the biggest problem in the next couple weeks.

In the long run, now is the time to buy the better financials that are only down because of the panic. Personally, I bought a bunch of one that was at $40 a share and is now in the pennies on the gamble that they survive the mess.

thank bush

I don't like BUSH ( did I really have to issue that statement ??? :1orglaugh ), but what does he have to do with that ????

he has been bailing out the financial industry over the last few months like crazy trying to hide the fact there are problems in the housing and stock markets

when the president has to step in TWICE in as many days and pump a few billion in to both markets you know there is something wrong

the feds have also cut short term morgage rates and it wont be long until they do the same with long term rates bevcause if they dont there will be millions of people in the us that cant afford their adjustable rate morgages

Nothing like storing money under the mattress like the good ol' days.

It's probably about a year a half until it's truly the buyers market.

On the side note, I sincerely hate Capital One with my entire heart. If you have a credit card account with them you should watch it every carefully. They have a tendency to report payments late even if you use their automated payment system. The most amazing part is they could give two shits if they are right or wrong since your credit is already fucked.

They'll get back on track.

Capital One - What's in your wallet?

Capital One isn't going anywhere. They only acquired Greenpoint, I think, last year or maybe a few years ago. Capital One is a very strong company.

:1orglaugh:1orglaugh

Capital One is not going out of business.

they are restructuring so that they can still stay in business :)

A few of my friends lost their jobs at Green Point yesterday. :(

Thats bad news.. But for sure they will not be out of business..

I dont get it, how that fucker: KBW MORTGAGE FINANCE INDEX goes up for one week, like they were no problems in mortage sector:
http://www.phlx.com/market/advcharts.asp?SYMBOL=MFX
I have put options /warrants/ on them.