(Bloomberg) -- Capital One Financial Corp. 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, Minnesota; and Melville, New York, 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 worth 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 non-bank financial institutions like Quicken Loans have entered the space, touting platforms that let users apply for loans on smartphones and get money faster. Non-banks accounted for more than than 70 percent 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, the spokesman said.
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