Alt-A Lender GreenPoint Mortgage Closes Multiple Offices

Article Date: 6/7/2007

As the problems with subprime mortgages continue to work through the system, GreenPoint Mortgage, a subsidiary of Capital One Financial has announced it is closing 12 of its operational centers and some branch offices with the loss of approximately 440 positions, primarily account executives, underwriters, and loan processors.

The affected offices are located throughout the country including locations in California, Idaho, Texas, Florida, Minnesota, and North Carolina and primarily handle underwriting and processing of loans.

GreenPoint, headquartered in Novato, California, is licensed to conduct mortgage business in 49 states and in 2005 had revenues of $210.4 million. In 2005 it operated 45 offices and employed 2,700 persons.

GreenPoint became a subsidiary of Capital One when the latter acquired North Fork Bancorporation in December of 2006 for $13.2 billion in cash and stock.

Julie Rakes, a spokesperson for GreenPoint said that the decision to close the offices was part of a consolidation of its operations which have been impacted by the fallout from the subprime market and the resulting tightened lending standards. GreenPoint is not a subprime lender, Ms. Rakes said, but its focus is the near prime market, largely the sector called Alt A mortgages. Tightened lending guidelines have reduced the volume of loan originations (some reports have said that the company was a specialist in low- and no-document loans) and have caused liquidity issues. "In order to remain competitive, we have had to review our staffing and make some difficult decisions. We do not take these decisions lightly and we at GreenPoint and Capital One fully realize the impact on our associates."

She stressed that the actions were primarily a consolidation and restructuring and that the territories which were served by the closed offices will merely be shifted to other operational centers where full service will continue to be provided.

Employees have been offered a severance package which includes outplacement services and employees who wish and are able to do so have been invited to apply to other Green Point offices where vacancies may exist.