There are have been plenty of subprime lenders cutting back on loans to the subprime market, cutting back on jobs and even worse, filing for bankruptcy. Of most recent, Delta, Accredited and Countrywide have announced all during the same week of cutting back on workforce to shift into the a tougher lending market and adapt to these turbulent changes occurring especially in the subprime and Alt-A markets.
Subprime lender Delta Financial Corporation cut about 300 jobs, equivalent to 20 percent of their workforce due to a decrease in loan originations. Accredited cuts 1600 jobs, equivalent to 62 percent of their workforce, therefore shutting most of its mortgage business to survive the turmoil in subprime lending. Countrywide Financial cut 500 jobs on Monday to also ride out the problems with the credit crunch. The cuts came in their subprime lending units.
Not only are lenders cutting back but because of rising layoffs happening both in mortgage lending, homebuilding, and banks many realtors are expected to decline in membership to The National Association of Realtors.
An analyst from Keefe, Bruyette & Woods Inc says “There is no functioning subprime market”.
And if that’s not enough. Captial One Financial Corp has mentioned that it would close its Greenpoint Mortgage Wholesale unit and layoff 1,900 people.