More Mortgage Woes

Yet another mortgage lender has announced that they are pulling out of the lending industry. Capital One Financial Corporation announced today that they are halting residential mortgage operations at it's wholesale mortgage banking unit, GreenPoint Mortgage, immediately. The reasoning is recent and continuing developments in in the mortgage industry have reduced profitability for the company. Although GreenPoint will immediately stop making loan commitments, they will honor all current loan commitments.

Also cutting costs is Countrywide Financial, announcing today that they are laying off employees involved in loan originations. They layoffs are of employees in the Full Spectrum Lending Unit, which deals with Alt-A loans, or mortgages that are between prime and sub prime loans in which borrowers aren't required to documents income. Ironically less then two weeks Countrywide was hiring more loan officers from rival mortgage companies that were forced to close down.

It's going to be interesting to see how the mortgage industry's woes will affect the consumer and their decision to purchase or sell real estate. Let's keep our fingers crossed for those that are in home loan limbo right now!