Capital One Financial Corp. saw its quarterly mortgage originations tumble.

The McLean, Va.-based bank reported first quarter production of $6.8 billion. The latest quarter was off $2.5 billion from the fourth quarter and down $1.0 billion from the first quarter 2006.

Capital One held an average of $9.1 billion in mortgages for sale during the latest quarter, according to a financial supplement to its first quarter earnings announcement. That figure was down from $0.2 billion in the first quarter 2006.

Mortgage banking net income was a loss of $12.6 million, compared to a $19.0 million profit in the fourth quarter and a $35.4 million profit a year earlier, the report indicated. Alt-A secondary market pressures forced the company to increase reserves for its representations and warranties by $19.0 million and reduce the value of its warehouse loans by $21.0 million.

"We've revised our earnings guidance down to $7.00-$7.40 per share for 2007, largely to reflect revised expectations for our mortgage banking business, which posted a modest loss in the first quarter," said Chief Financial Officer Gary L. Perlin in the announcement. "Assuming no improvement in the unusually weak conditions now present in the secondary market for non-conforming prime mortgage loans, including Alt-A, we expect that reduced volumes and margins would result in our mortgage banking business delivering no incremental earnings for the balance of 2007."

The mortgage banking unit is part of Capital One's national lending segment.

Capital One acquired GreenPoint Mortgage and North Fork Bancorporation Inc. in December.