Capital One announced Tuesday it is permanently closing its mortgage and home equity originations business.

Capital One President Sanjiv Yajnik company announced the company's decision in an email, which stated that the company has come a long way since first acquiring the mortgage and home equity division back in 2009. However, despite these advancements, Capital One said the mortgage market is too competitive to make money in the business.

From the email, via the Dallas Morning News:

While the businesses have made great progress in recent years, we have made the incredibly difficult decision to exit originations in Mortgage and Home Equity. We will continue to service our existing home loans portfolio, as we evaluate strategic options for the future of Home Loans Servicing.

We have also taken a look at the go-forward structure of the Financial Services Division, weighting it against our future needs and expectations. In doing this, we’ve had to make some tough decisions that will impact a number of our Associates. Although some Associates will be asked to take on new work or report to a new manager, many roles will be eliminated. Associates who will no longer have roles were notified earlier today, and we are providing a variety of resources to support them through the process.

Capital One said the decision to close down its mortgage and home equity division was not based on the performance of the division’s teams.

“We had the right talent, the right products, and the right customer experience,” Yajnik's email stated. “I am so very proud of what each person had done to help build these businesses.”

However, the company explained external challenges worked against the division such as the high competition and the low rate environment, preventing it from being profitable.

This announcement comes after, in 2015, Capital One stepped up its game to be a major player in the digital space. And echoing others in the industry, it moved into digital because that’s what consumers want.

As company closes its home loan division it will lay off 750 people in Plano, Texas and about 155 employees in St. Cloud, Minnesota and Melville, New York, a company spokesperson said. The company will continue to service its existing and pending home loans, but it will not originate new ones.

Capital One will continue to provide specialized multifamily financing to the real estate development and investment community, including customized national agency finance solutions through Fannie Mae, Freddie Mac and FHA.

Additionally, as Yajnik said in the email, the company plans to continue its mortgage servicing operations for the time being, but will be evaluating its options moving forward in that area as well.

In an unrelated announcement, the company also announced that its Retail Bank made the "difficult decision" to exit its customer contact center in Plano. While there are no immediate changes as a result of this announcement, the transition will occur over the next several months and will impact about 200 associates, the company said.

“Decisions that affect people are among the most difficult to make, especially when those people have contributed so much,” Yajnik wrote. “While news like this is never easy, we will fully support all of our impacted associates through their transition with the deepest care and access to resources that include career development services and career fairs, severance, and benefits continuation. Given our impacted associates’ skillset and the very active job market, I am confident they will be highly sought after.”

The company announced it will host career fairs for its impacted associates to meet with employers in the Dallas-Fort Worth area who are actively hiring. One of the job fairs will have an emphasis on employers from the home loans industry.

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