Capital One's woes

NEW YORK (CNNMoney.com) -- Capital One Financial Corp. said it would shut a mortgage lending business it bought less than a year ago and cut 1,900 jobs.

The announcement from Capital One is the latest in a string of announcements from lenders as problems in the subprime mortgage market have spread.

And as we've been saying, banks are well aware of this crisis and tightening up their purse strings, which is making it harder for people to get a loan.

People hear Capital One (Charts, Fortune 500) and they think about credit cards. That's true. But when Capital One bought GreenPoint Mortgage in December, it bought North Fork Bancorp as a part of a greater move to diversify the credit card company.

GreenPoint specialized in unconventional loans - jumbo mortgages and loans that didn't need verification of the borrower's income or assets. Those are exactly the kind of loans that helped to fuel the housing boom - and the consequent crisis.

If you have a mortgage or are under contract with this company for a loan, don't panic.

While GreenPoint will not make new loan commitments, it will honor contractual commitments to borrowers who have loans in the pipeline with locked-in rates, according to the company. Capital One said it will continue to offer mortgages through its bank branches and other units.

Some analysts are on record saying that shedding this business could be a positive move by Capital One because it would eliminate the mortgage risk GreenPoint represented. This would also be good news for customers.

Aside from Capital One's announcement, all eyes continue to be on Countrywide (Charts, Fortune 500), the country's largest mortgage lender. The stock is plunging and customers are reportedly lining up at offices and asking about the safety of their deposits.

But not all customers should be too worried. If you have $100,000 dollars or less in your bank account or CDs, your money is insured by the Federal Deposit Insurance Corp. - the FDIC.