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by Il_Bagattel, Tuesday, August 21, 2007, 03:59

One of my enterprises needs regular restocking of inventory. I handle this expense with a Capital One credit card when I phone in the order. This is essentially all that I ever use this card for.

Yesterday I placed just such an order. Within the hour I was receiving panicked calls and emails from my daughter, whose US telephone is listed as the contact source for that card. The fraud prevention folks at CapOne were in a dither over the charge.

Now this is not unusual, since they do this every time, although this periodic charge, to the same party, has to be on their records. What was different this time is that they declined the charge to the seller. The email invoice from the seller made me aware of this. Fortunately we are on very friendly terms and the order went on into shipping status.

Here is part of the text that I sent to the seller's accounts receivable girl:

"Capital One has their fraud prevention goons all over my daughter in Tulsa, no doubt, about the charge to the card that you tried to make. I will call them and get it straightened out.

"They do this every time that I use that card with you, but this is the first time they have actually declined the charge. Morons. All they have to do is look at the card history to see that, like clockwork, there is a periodic, comparable sized charge to XXXXX.... but noooo. They must be up to their eyeballs in the subprime mortgage mess and can't afford any credit card losses.

"Sorry about that. I'll have it OKed by tomorrow and you can make another run at it."

Then today I find this bit of news:

Capital One Shutting Down Alt-A Mortgage Unit

By Valerie Bauerlein

Capital One Financial Corp. (COF) plans to shut down its struggling GreenPoint mortgage unit, becoming the latest casualty in the mortgage meltdown. Capital One bought GreenPoint in last year's $13.2 billion purchase of North Fork Bancorp, of Melville, N.Y. North Fork had earlier paid $6.3 billion for GreenPoint Financial Corp., then a large N.Y. savings-and-loan specializing in mortgages.

The unit specialized in so-called non-conforming loans, which don't meet the standards set by Fannie Mae (FNM) and Freddie Mac (FRE), the government-sponsored providers of mortgage funds. GreenPoint specialized in "jumbo" loans above the $417,000 limit and Alt-A loans to home buyers who don't fully document their income or assets.

Heh heh... big trouble in River City

Get ready folks. You are going to be seeing some very bizarre behavior regarding your credit cards issued by the big banks with high exposure to the sub-prime mortgage markets.

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