More Subprime Fallout: Greenpoint Mortgage Is A Goner

Another mortgage company casualty after the bell yesterday announced by Capital One Financial Corp. (COF) during their earnings report.

In addition to cutting its earnings forecast from $7.15 to $5/share, COF announced that they would eliminate their Greenpoint mortgage unit (the 7th largest Alt A lender) and eliminate 1900 jobs. According to the WSJ, Capital One bought Greenpoint, which specialized in jumbo and Alt A loans less than a year ago in a 13.2 billion dollar deal.

With other large layoff announcements from Countrywide Financial Corp. (CFC) and SunTrust Banks (STI) yesterday alone and thousands more to come as other mortgage companies fold, you have to wonder just how much impact this will have on the economy from an employment perspective, which has been largely ignored up to this point. The housing boom was able to cushion the blow of many jobs being shipped overseas, so the impact could be great.