WMC On the Block

Earnings for GE Money, the division under which WMC is managed, was $952 million — climbing 8 percent from a year earlier, an earnings supplement indicated. Losses at WMC were offset by 29 percent growth in U.S. card and sales finance and 26 percent growth in European operations.

GE Money on-book delinquency was reported at 5.39 percent, while managed delinquency was 5.36 percent.

Second quarter earnings at GE were a record $12 billion — a 12 percent increase from a year earlier, the data indicated.

“For the quarter, GE Money had strong global growth in revenues and assets, and increased segment profit 8% despite a loss at its U.S. mortgage business, WMC,” said GE Chairman and Chief Executive Officer Jeffrey Immelt said in the announcement. “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.”

This is not GE’s first time to exit the subprime mortgage business.

General Electric Credit Corp., which was a home equity lender, was sold to the Philadelphia Savings Fund Society in the early ’80s. That company, which operated at PSFS Credit Corp. and, subsequently, Meritor Credit Corp., was acquired by Ford Motor Co. later that decade and integrated into Ford subsidiary Associates First Capital. Ultimately, Citigroup acquired that unit — dismantling much of the infrastructure.

Several former GECC executives now occupy senior executive positions at Nationstar Mortgage LLC.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com