Capital One Financial will stop originating mortgage and home-equity loans after competition made it difficult for the businesses to be profitable.
The company will cut 905 jobs across offices in Plano, Texas; St. Cloud, Minn.; and Melville, N.Y., as part of the move, according to an internal memo. It’s also eliminating about 200 jobs at a call center in an unrelated move. Capital One had about 50,400 employees as of Sept. 30, according to a regulatory filing.
“These businesses are in a structurally disadvantaged position, given the challenging rate environment and marketplace,” Sanjiv Yajnik, president of financial services at Capital One, said in a memo to employees. “These factors do not allow us to be both competitive and profitable for the foreseeable future.”
Capital One had about $20.6 billion of residential mortgage loans as of June 30, according to data compiled by Bloomberg Intelligence. That made it the 12th-largest mortgage lender among banks.
Home lending has become increasingly competitive as nonbank financial institutions like Quicken Loans have entered the space, touting platforms that let users apply for loans on smartphones and get money faster. Nonbanks accounted for more than than 70% of Federal Housing Administration loans as of July, and Quicken is the second-largest mortgage provider in the U.S.
Capital One will still provide loans for affordable housing and multifamily financing to real estate developers and investors, a spokesman said.