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100s Laid Off at GreenPoint

440 jobs cut due to production

June 9, 2007


photo of Coco Salazar

Slowed production led GreenPoint Mortgage to consolidate operations and layoff 15 percent of its staff.

The past two days held gloomy news for GreenPoint employees -- 440 of them were notified their jobs were eliminated, Julie Rakes, spokeswoman for parent company Capital One, told MortgageDaily.com in phone interview today.

While a small group of the layoffs occurred at the Novato, Calif., headquarters, the larger majority resulted from the closure of 12 operational centers, which leaves GreenPoint with 29 centers, she said.

"We've experienced a reduction in production," Rakes said. "The volume is causing us to reduce staffing levels and centers" to align costs with current market conditions and remain competitive.

"It's a difficult decision for the company to make," she added. "We don't take it lightly to go through these tough decisions."

Capital One recently revised its earnings guidance down after first quarter mortgage production of $6.8 billion came in 27 percent below the level in the fourth quarter and the mortgage banking business posted a "modest" loss. "Assuming no improvement in the unusually weak conditions now present in the secondary market for non-conforming prime mortgage loans, including Alt-A," the company expected reduced volumes and margins would result in no incremental earnings for the mortgage banking segment through yearend, according to an announcement.

The dozen closed facilities were located in California, Idaho, Texas, Florida, North Carolina, Michigan, Ohio, Illinois and Minnesota and primarily employed underwriters, loan processors and account executives, according to the spokeswoman.

While GreenPoint, which says it specializes in no-documentation and Alt-A mortgages, has shifted loan underwriting and processing functions to remaining sites, it will still have a presence in those eight states, Rakes emphasized. For example, the North Carolina center eliminated the wholesale branch but still has other operations in place such as compliance, while in Chicago, the work of one center is being consolidated into another nearby location.

Prior to the layoffs, GreenPoint's staff numbered to approximately 2,700, Rakes said. Affected employees were eligible for severance packages, including outplacement services.

Coco Salazar is an associate editor and staff writer for MortgageDaily.com.

e-mail: [email protected]

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