GreenPoint Mortgage, RIP

Breaking News -- Another lender bows out: "Capital One Financial Corporation 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."

The Wall Street Journal: "Citing great difficulty selling loans to the secondary market, Capital One officials said the bank will closing GreenPoint's 31 locations and eliminating 1,900 jobs immediately."

Pulse of the mortgage market today? This from Lou Barnes of Inman News: "As of this morning, the non-Agency mortgage market is still just plain closed."  More from Lou later today.

Comments? Insights?

Comments

[Lewis B. Sckolnick]

We all saw this coming at least three years ago, it was only a question of when it would hit.

[Joe Haha]

Captiol One...WHATS IN YOUR WALLET? Um...nothing evidently... Doh!

[carl saunders]

ANOTHER ONE BITES THE DUST

Today its GreenPoint Mortage. Who will it be tomorrow? It's amazing how we Americans have this penchant to destroy good thing. As the real estate market boomed we just could not be satisfied following the conventional rules or guidelines to qualifying for a mortgage. Instead we allowed unscrupulous mortgage brokers to hijack the system, by throwing the mortgage qualifying guidelines out the door, and providing mortgage loans to individuals who clearly did not have the means to service these death obligations. The result - the subprime mortgage meltdown, and the markets in turmoil. How can a few bad apples get away with spoiling it for so many? Where was the oversight? or is it a case of willful blindness on all our part.

[Marjorie Fouts]

Perhaps its time to look at giving too much credit to college students without
sufficient income, too - ya think?

[Confidential, too sad a story]

Based on after-the-fact things I learned about a first-time-buyer family member's situation involving 100% financing by GreenPoint, and the loan application statements that had been encouraged, it couldn't have happened to a nicer lender.

[Cal]

The non-agency secondary market may be closed but portfolio lenders are still in the game for jumbos and other type of products.

Just ask your local credit union:
http://www.marketwatch.com/news/story/no-crunch-credit-union-mortgages-qualifying/story.aspx?guid={FFAB190D-BF66-43A7-BE8A-910D7249BE98}&siteid=yahoomy

This is all a good thing, sound underwriters will survive and make money. They may not have made as much as other during the boom, but they also will be around when the smoker clears. Slow and steady wins the race.

[David Cavallero]

This is an example of good old american greed. There is no way homes in California are worth that much more than the rest of the nation. Between the credit cards and people borrowing from their equity to refinance their interest only payments...this industry will not be the same anytime soon.

[yours truly, johnny dollar]

So simple; even a caveman could do it.

[investorguy]

I got three faxes from non-major lenders today who said they will be coming out with new jumbo and Alt-A programs within a few weeks. WAMU said today that they're happy to make qualified jumbo loans -- a smart move to recapture the qualified slice of that market.

Money will start flowing again shortly. Maybe at a higher rate, but it'll be flowing for qualified LA buyers.

[RB]

IN REGARDS TO GREENPOINTS CLOSING YESTERDAY, THEY WERE TO HONOR ALL LOANS IN THE PROCESS. I AM A REALTOR IN MICHIGAN, MY BUYERS WERE USING GREENPOINT. WE RECEIVED A CALL AT 2;00 IN THE AFTERNOON FROM THE LOAN OFFICER STATING THAT IF THE LOAN WAS NOT CLOSED BY 5;00 THERE WOULD BE NO LOAN.
BUYER RACED IN FROM OUT OF STATE TO THE TITLE COMPANY ONLY TO FIND GREENPOINT WAS CLOSED FOREVER...
AMAZING!!!

[smokey]

Hey investorguy,

A few blogs back you said:

"Hey, Smokey. Don't get crushed by the herd, man.

Professionals who make money in real estate make money in ANY market. But not by listening to people like you and the other sky-is-falling types. Get creative and you'll make money. Or go back to bed and lose money."

SO........get out there and make some money in this DOWN market.....Quit worrying about finding another fool willing to loan hundreds of thousands of dollars to those who'll never be able to repay the note. The sky is not falling but SoCal home prices are!!! Accept it.....

[investorguy]

Smokey... that's what I'm doing.

I'm just pointing out that there's still money out there. Too many commenters here are convinced that the Apocalypse is nigh. It's not pretty out there, but there's opportunity if you know where to look.

BTW, interesting report this morning that Warren Buffet is interested in buying parts of Countrywide.

[DisgustedbyCapitalOne]

You are all talking about people making money here and making money there and others are saying those people over at GreenPoint are getting what they deserved. Well first of all as usual no one is talking about the 1900 people who lost there jobs yesterday most finding out from the news media because Capital One didn't care enough about there employees to annouce it to them in private before annoucing to the news media. I heard of at least one employee who heard it on there car radio on the way home from work. And isn't it funny that they waited until the market closed to announce it so there stock wouldn't have a whole day to tank. And to the person who said they got what they deserved. Stop being so ignorant. The majority of the people who worked for GreenPoint had nothing to do with making mortgages and work behind the scenes never knowing anything about bad mortgages or who is getting them and who can't afford them. They are just like you, good people who are putting in a days work and just trying to survive day to day, so don't say they got what they deserved. I remember when a company closed the main story was the people who lost there jobs, not anymore it is how much money is the parent company going to lose. If you ask me for a company like capital One $860 million dollars is a drop in the bucket but oh BooHoo for them. Capital One and Big Business you make me sick.

[Sam Madison]

I worked at Greenpoint in 2004. After 3 months at the job my Manager came to my desk and informed that my services are no longer needed because the business was slow. Greenpoint was kind enough to give its laid off employess 2 weeks severnce pay after getting us signed a document that we would not sue the company for being terminated.
The atmosphere at Greenpoint was hectic. Lot of subprime loans and we had a Manager who was micro managing us. Every morning all Sales Associates, Loan Processors, Underwriters were gathered ina conference room for about half an hour and all the employees were held accountable for company's business and had to tell the Mangers what they had done the previous day.
We had Underwriters. Loan Officers and Loan processors each working with many customers and getting the loans closed.
I miss Greenpoint even though the pace was very hectic. The company closed lot of loans and did treat its employeed fairly. I am very saddened by the demise of Greenpoint.

[Future husband of an Underwriter]

"...this is all a good thing, sound underwriters will survive and make money..."

Really? Tell that to my fiance. She's worked for WaMu, Household, etc - she's been underwriting for 10 years and was recently laid off (not by Greenpoint). Anyway, my point is that it's not the underwriters' fault or decision on what loans get approved... she would have denied half the loans that came across her desk if she could have. However, she had no control over the guidelines she was forced to underwrite to - and even when she thought she could deny a loan, she was usually forced to 'find a way to make it work'. So does that make her an 'unsound' underwriter? Because she certainly didn't survive, and isn't making any money.

[CB Tampa]

I agree with a previous post that this is not about GreenPoint, but the employees who lost their jobs. First Magnus closed it's doors, and the employess just learned that they will not get paid due to bank accounts being frozen. As if it were not bad enough to learn that they lost their jobs, but further insult to not be compensated for their hard work as well. These people also have mortgages to pay, and given their profession may not find work any time soon. Greed may have caused the problem, but lack of compassion and Monday morning quarter-backing will not help these people in any way. Another Enron? Live and learn. New reports this morning that Bank of America pumped 2 Billion into Countrywide. Alt_A, subprime and 2nd mortgage products are all but extinct. Mortgage Insurance is the golden child of the industry where they had been laughed out the door of mortgage companies for the past five years. FHA is looking better, and has a lot of money to lend. A young family today has a better shot of owning their first home than they did yesterday. Maybe their is a bright side.