General Electric Co. plans to sell its subprime lending unit, WMC Mortgage, and has already unloaded $3.7 billion in WMC loans in the second quarter, the company announced Friday.
Based in Burbank, Calif., WMC Mortgage was reportedly once the fifth-largest subprime lender, funding $33 billion in loans in 2006.
WMC announced in March that it was laying off 460 employees, and had stopped making zero-down loans or loans to borrowers with FICO scores below 600.
In a Securities and Exchange Commission filing, General Electric said profits at WMC’s parent company, GE Money, were up despite losses at WMC.
“For the quarter, GE Money had strong global growth in revenues and assets, and increased segment profit 8 percent despite a loss at its U.S. mortgage business, WMC,” said GE Chairman and Chief Executive Officer Jeff Immelt. “We have made the decision to exit this business and substantially reduced our exposure by selling $3.7 billion of WMC loans in the quarter.”
GE said second-quarter net income totaled $5.42 billion, or 53 cents per share, up from $4.95 billion, or 48 cents per share, last year.