Capital One to close mortgage unit
Last Updated: Monday, August 20, 2007 | 6:05 PM ET
The Associated Press
Capital One Financial Corp. said Monday it will close its wholesale mortgage unit due to woes in the secondary mortgage markets, resulting in $860 million US in charges in 2007.
The company, which said about 1,900 positions would be eliminated due to the closing of the unit, added it will "cease residential mortgage origination" at the unit, called GreenPoint Mortgage, effective immediately.
"The reductions in demand and pricing in the secondary mortgage markets make it difficult to operate our wholesale mortgage banking business profitably," said Gary Perlin, Capital One's chief financial officer.
The company said GreenPoint will stop making new loan commitments, but it will continue to meet its contractual obligations to customers for loan commitments with locked rates that are already in the pipeline.
Capital One said it will incur charges of about $2.15 US per share, for closing the division. Most of the charges will be included in the 2007 results. As a result of the charges, the company said, it now expects earnings per share of $5 US for the year.
Analysts polled by Thomson Financial expect earnings of $7.05 US per share. Analysts estimates typically exclude one-time charges.
Capital One shares fell $2.03 US to close at $66.72 US on the NYSE. News of the mortgage unit's closure came after the market closed Monday.
Share Tools
Top News Headlines
- Air Canada confident it can reach deal with pilots
- Travellers flying Air Canada can keep booking their flights as negotiations continue with a new federally appointed mediator to help resolve an ongoing contract dispute between the airline and its pilots. more »
- Legalize pot, say former B.C. attorneys general
- Four former B.C. attorneys general are joining a coalition of health and justice experts calling for the legalization of marijuana. more »
- Whitney Houston's funeral to be held Saturday
- Pop star Whitney Houston's funeral service will be held Saturday in the New Jersey church where she first showcased her singing talents as a child. more »
- CN blamed for fatal train derailment in Illinois
- CN is being blamed for a 2009 train derailment in Illinois, in which several cars went off the tracks and caught fire, killing one person and injuring seven others. more »
Latest Business Headlines
- Air Canada confident it can reach deal with pilots
- Travellers flying Air Canada can keep booking their flights as negotiations continue with a new federally appointed mediator to help resolve an ongoing contract dispute between the airline and its pilots. more »
- CPP invests $1.8B in U.S. malls
- The Canada Pension Plan Investment Board is making a whopping $1.8-billion investment in shopping malls in the U.S. with a new joint venture agreement with the Westfield Group in its biggest real estate deal to date. more »
- Nortel hit by suspected Chinese cyberattacks for a decade
- Hackers based in China enjoyed widespread access to Nortel's computer network for nearly a decade, according to a report. more »
- CN blamed for fatal train derailment in Illinois
- CN is being blamed for a 2009 train derailment in Illinois, in which several cars went off the tracks and caught fire, killing one person and injuring seven others. more »
Lang & O'Leary Exchange
Markets
| Index | Last Trade | Change |
|---|---|---|
| TSX COMPOSITE | 12354.47 | -44.22 |
| DOW | 12878.28 | 4.24 |
| NASDAQ | 2931.83 | 0.44 |
| SP 500 | 1350.5 | -1.27 |
| NYSE COMPOSITE | 8029.61 | -26.64 |
| AMEX | 2429.06 | -2.72 |
| TSX-VENTURE | 1630.03 | -19.33 |
The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.
Business Features
- Online surveillance critics accused of supporting child porn
- Whitney Houston's funeral to be held Saturday
- HMCS Corner Brook collision damage extensive
- Online surveillance bill targets child porn: Toews
- Mooning Queen proves costly for Australian man
- Legalize pot, say former B.C. attorneys general
- MacKay says submarine fleet has 'spotty' history
- Man kidnapped at Greyhound station escapes captors
- Stanley Cup rioter seen in brick attack on cop
