WMC - Subprime Wholesale
2007-10-12
stories: thestreet.com, marketwatch.com, cnn.com
Update, 2007-10-30
TheStreet.com has a story on what is apparently the last large wave of layoffs from WMC:
GE's crippled subprime mortgage business, WMC Mortgage, laid off most of its workers on Monday afternoon, TheStreet.com has learned.
All loan processors, underwriters and loan officers have left the business. A customer service operator at the lender said it's still operating with a "skeleton crew."
"They're working the pipeline that is here," said the operator. "They are taking originations, but we're down to minimal staff levels as of yesterday afternoon."
GE announced that it was exiting the business over the summer, when the U.S. subprime mortgage fiasco caused a meltdown in the global credit markets.
The conglomerate said in September that it had roughly $1 billion in mortgage assets on its books and it was "aggressively" trying to sell WMC.
The article opines that WMC may be simply "dying a slow death." We would have to say, that is certainly not a crazy synopsis.
Update, 2007-10-10
We are now listing WMC as "imploded" since GE plans to list the operation as "discontinued". Whether they sell all or part of the subsidiary, this kind of statement of intent is rather clear.
Update, 2007-09-28
A number of people have written in to point out that GE's plans are still to sell the WMC unit, and that articles such as the above are premature/erroneous. We're going back to a "wait and see" approach until WMC's status becomes more definitive.
Original post
GE is apparently giving up on WMC (as we knew the bottom-line driven conglomerate eventually would be compelled to). This information was confirmed publicly on September 19th 2007, so this is a retroactive add (by a few days). The key paragraph from the above story is:
GE expects to take a $300 million to $400 million charge as it exits its WMC Mortgage Securities LLC business. A few months ago, the company announced plans to close the unit. and expects to complete the deal in the fourth quarter.
This is a little bit revisionist. Our recollection is that GE planned to sell the unit—which is why they were not on the Implode-o-Meter list before now. [Note: apparently articles like these were not just "revisionist", but mistaken. For now.]
Important: This company is on our list of lending operations that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.
