Monday, August 20, 2007

Capital One Shuts Down GreenPoint Mortgage Unit

by Bill McBride on 8/20/2007 05:03:00 PM

From the WSJ: Capital One Shuts Down GreenPoint Mortgage Unit

Capital One Financial Corp. plans to shut down its struggling GreenPoint mortgage unit ...

Capital One bought GreenPoint in last year's $13.2 billion purchase of North Fork Bancorp, of Melville, N.Y. North Fork had earlier paid $6.3 billion for GreenPoint Financial Corp., then a large N.Y. savings-and-loan specializing in mortgages.

The unit specialized in so-called nonconforming loans, which do not meet the standards set by Fannie Mae and Freddie Mac, the government-sponsored providers of mortgage funds. GreenPoint specialized in "jumbo" loans above the $417,000 limit and Alt-A loans to home buyers who do not fully document their income or assets.
Update: Tanta on GreenPoint (from the comments to previous thread):
Let me say that GreenPoint basically invented Subprime-in-Alt-A-Drag.

If memory serves me correctly, they were about the first to do every stupid $%# thing that every other Alt-A lender proceeded to do in the great race to the bottom.

Stated IO 100% cashout at 620 FICO on a 6-month ARM with a prepayment penalty? Hell, GreenPoint would do it if you threw in a lender-funded buydown and an old appraisal!

Sorry I'm being bitter. I spent several years listening to people say, but GP does that! Why are you being such a hand-wringer!