The troubled residential mortgage market continues to stumble, and employees in the sector are beginning to feel the effects.
Capital One Financial Corp. on Monday announced it would end operations at its wholesale mortgage-banking unit ? California-based GreenPoint Mortgage Funding Inc. ? and eliminate 1,900 positions, most by the end of the year.
“We?re in a credit crunch right now, and when the money dries up, the employment market dries up,” said Joseph Rooney, deputy commissioner of finance regulation for the Maryland Department of Labor, Licensing and Regulation.
“A lot of people saw the lending game was profitable a few years ago and jumped aboard,” Rooney said. “Now, they?re all jumping off.”
Capital One will close GreenPoint?s headquarters in California and 31 locations in 19 states, including offices in Silver Spring and Owings Mills.
“The reductions in demand and pricing in the secondary mortgage markets make it difficult to operate our wholesale mortgage banking business profitably,” Gary Perlin, Capital One?s chief financial officer, said in a statement.
Capital One?s announcement came on the same day SunTrust Banks Inc. announced it would cut 2,400 jobs by the end of 2008 in its attempt to achieve $530 million in annual gross savings by 2009.
The Atlanta-based banking organization operates 1,685 retail branches in Maryland, and the Southeastern and mid-Atlantic states.
A DLLR spokesperson said the department has not yet received employee termination notices from the two companies.
Maryland?s unemployment rate saw little change from June to July, according to preliminary numbers from the DLLR.
The state?s seasonally adjusted unemployment rate increased to 4 percent in July from 3.8 percent in June. The number of people employed in Maryland and the number of job seekers in the state increased, according to DLLR data.
Maryland?s unemployment rate remained below the national rate, as the U.S. seasonally adjusted rate increased to 4.6 percent in July from 4.5 percent in June.
In Baltimore City, the unadjusted rate increased to6.9 percent in July from 6.4 percent in June, with 19,500 people unemployed.
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