26 replies to this topic

[SemiBizz]

Capital One Closes Wholesale Mortgage Unit
Revises 2007 EPS guidance down by $2.15 per share;

Expects 2007 EPS of approximately $5.00 per share

MCLEAN, Va., Aug. 20 /PRNewswire-FirstCall/ -- Capital One Financial Corporation (NYSE: COF - News) today announced that it will cease residential mortgage origination operations at its wholesale mortgage banking unit, GreenPoint Mortgage, effective immediately. Current conditions in the secondary mortgage markets create significant near-term profitability challenges, given the company's "originate and sell" business model. 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 for the foreseeable future. GreenPoint Mortgage will cease making new loan commitments immediately, however, it will continue to meet its contractual obligations to customers for loan commitments that are in the pipeline with rates locked

What's in your wallet?

Edited by SemiBizz, 20 August 2007 - 03:44 PM.

[Jnavin]

But...not quite as shocking anymore, huh? It's more like: this is expected at this point.

[hiker]

yes, SPY 144.35 crossed in recent price action vs. close some distance above

[SemiBizz]

But...not quite as shocking anymore, huh?
It's more like: this is expected at this point.

Oh yeah... this is BOOOLISH.

[Jnavin]

Not what I was indicating, Semi. Good luck.

[SemiBizz]

I dunno JN, market loves certainty... bullish... Just kidding you...

[denleo]

But...not quite as shocking anymore, huh?
It's more like: this is expected at this point.

Exactly!!! Everyone I know is expecting a bankraptcy or more bad news from mortgage / real estate / home building companies. Why would it take the market down? We know things are bad. It is not bearish any more.

Denleo

[Iblayz]

And 650 million of the 860 million are for the non-cash write-down of the goodwill associated with the prior purchase of GreenPoint and still on the books. Now I hate this stuff because it's still real money but the truth is.....that is not the way that such write-downs are viewed. They already knew about the purchase price (i.e., its always too much) and as such, the only focus will be on the material write-down....and since another 100 million is after-tax restructuring charges.....we are not talking about a tremendous amount of money. Headline looks awful....but my guess is that the most awful part about it is the after hours spin and the heavy shorting of the indices that accompanied it. Again, I hate the way this stuff plays out because shareholders get the short end....it was their money....but the key is the word was....it WAS spent last year.

[mike123]

And 650 million of the 860 million are for the non-cash write-down of the goodwill associated with the prior purchase of GreenPoint and still on the books. Now I hate this stuff because it's still real money but the truth is.....that is not the way that such write-downs are viewed. They already knew about the purchase price (i.e., its always too much) and as such, the only focus will be on the material write-down....and since another 100 million is after-tax restructuring charges.....we are not talking about a tremendous amount of money. Headline looks awful....but my guess is that the most awful part about it is the after hours spin and the heavy shorting of the indices that accompanied it. Again, I hate the way this stuff plays out because shareholders get the short end....it was their money....but the key is the word was....it WAS spent last year.

People don't get it!!! Who is going to originate mortgages? People who have to sell houses due to financial difficulties will not be able to sell because buyers can't get financing. Forclosures will be widespread. We should get at least equivalent 100% default rate on subprimes.

[securelstmile]

The wholesale mortgage market is done. Everyone knows it. If you want a mortgage go to the bank, put down 20%, like the old days. Banks will finance your home if you should get a loan, they will keep the loan too like the old days. This is not a bad thing. It is as it should be.