Two Virginia-based bankers have decided to shutter their mortgage-lending units.

In Chantilly, Alliance Bankshares Corp. announced it decided to cease operations of Alliance Home Funding LLC as a stand alone mortgage banking subsidiary and instead will operate it as a division of Alliance Bank.

"Since inception in 2001, Alliance had the goal to have a small, customer focused, profitable mortgage banking unit," said Thomas A. Young Jr., Alliance president and chief executive, in the announcement. "Our business results over the past several years have fallen short of that objective."

"As we enter 2007, with a continued modest outlook in the housing sector, we felt a radical change was necessary."

The move affects 43 employees, but 10 of them will join Alliance Bank organization as part of a mortgage banking division.

Alliance said it will take a fourth quarter pre-tax charge of between $540,000 and $675,000 to wind down the mortgage subsidiary operations, which will result in an after-tax impact on fourth quarter earnings of $350,000 to $450,000. The charges cover staff severance, systems charges, and estimated subleasing costs, among other costs.

Meanwhile, in McLean, Harbourton Capital Group Inc. said its subsidiary Harbourton Mortgage Investment Corp. ceased funding new mortgage loans and initiated a process to wind down its operations on Dec. 20.

The subsidiary "was forced to take these actions when it was unable to satisfactorily resolve mortgage repurchase claims asserted by selected investors that had purchased mortgage loans," Harbourton said.

As a result, Harbourton said it will likely write off its full investment in the subsidiary. The parent said it was negatively impacted in 2006 by the mortgage unit's significant losses and requirements for new capital and hopes the cessation of these losses will enable it to stabilize financial operations next year, as it focuses on its primary business of providing project financing to builders and developers of residential, for sale projects through Harbourton Financial Corp.