From The Herald Tribune article:

NEW YORK: In yet another casualty of the fallout in the mortgage industry, Capital One Financial said that it would stop making residential mortgages and close GreenPoint Mortgage, its wholesale mortgage banking unit.

This is the third(?) major mortgage company in a week to either scale back, close division(s) or declare bankruptcy. This will be affecting 1,900 employees in 31 locations, spaced around 19 states. GreenPoint was acquired as part of another purchase in Dec 2006, and was the 23rd largest mortgage lender. Layoffs are expected to be complete by the end of the year.

How is this going to affect the market?? For a market that is already scared because of the other mortgage company cutbacks/closings, another is only going to add more fuel to the fire. Possibly, if we’re lucky, this will be lumped together with the other closings, and be perceived as a ‘blip’ by the market as a whole, rather than causing more sell-off and panic.

It’s continuing to look bleak for the foreseeable future for the ‘easy mortgage’ people. Getting mortgages w/o income, or a pretty substantial down payment looks like it might become a thing of the past. If companies require more verification of income, better debt-to-income levels, and all the OTHER indicators they should have been requiring, it’s going to have a depressing effect on the housing market (IMHO) until the supply and demand and the housing prices all come into equilibrium.

If you’re in a McMansion right now, leveraged and mortgaged to the gills, it might be prudent to start planning for an exit strategy. Either that, or make sure that you have enough income to cover any ARM increases that WILL be coming along. The ability to refinance at the drop of a hat, or selling for a profit after only holding for a year also looks like it’s gone for now.