Capital One Financial Corp. (COF) announced it is closing it wholesale mortgage unit, which will end up costing 1,900 jobs.
Accorging to the company, effective immediately they'll stop originating mortgages through its GreenPoint Mortgage business.
The Greenpoint unit has 31 locations across 19 states, which will all be closed by the end of 2007.
"Current conditions in the secondary mortgage markets create significant near-term profitability challenges," Capital One said in a statement. "Further, recent and continuing developments in the mortgage markets reduce the long-term outlook for profitability in the business, as the company expects markets for prime, non-conforming mortgage products are likely to remain challenged."
Charges connected to the closings will be somewhere in the $860 million range. With that in mind, the company says earnings for 2007 will be somewhere in the $5 a share range. Before the announcement of the closings, analysts had been looking for about $7.05 earnings per share for 2007.
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