Capital One to Shutter GreenPoint Mortgage

U.S. bank holding company Capital One Financial Corp. said Monday it would shut down its GreenPoint mortgage unit that specialized in non-conforming loans.

In doing so it will immediately eliminate 1,900 jobs and close GreenPoint Mortgage’s California headquarters and 31 locations in 19 states, the company said.

The McLean, Va., holding company said the subsidiary — which it bought in December’s $14.6 billion purchase of North Fork Bancorp of Melville, N.Y. — would make no more new mortgages but would fund those already in the pipeline with locked-in rates.

Non-conforming loans do not meet the standards set by Fannie Mae and Freddie Mac, the government-sponsored providers of mortgage funds.

That sector of the mortgage market is likely to remain challenged for the foreseeable future, Capital One said.

GreenPoint specialized in jumbo loans above $417,000 and loans to home buyers who do not fully document their income or assets.

Capital One — which also specializes in credit cards and auto loans, as well as traditional banking and savings product — said it would take an after-tax charge of $860 million, or $2.15 a share, due to the GreenPoint closure. It also revised its 2007 earnings guidance downward to about $5 per share.