Mortgage Daily Logo

WMC Fundings Free Fall

Mortgage News

Origination News | Lender Ranking | Fundings by Lender | Statistics
Quarterly residential mortgage production by lender. Subprime, Alt-A, home equity and conforming originations. Volume by quarter since 2003.

WMC Fundings Free Fall

$3.4 billion 1st quarter production

April 16, 2007


photo of Coco Salazar
WMC Mortgage has stopped underwriting subprime loans based on what Wall Street wants. But the move has had a pronounced impact on production.

In the first quarter, the nonprime wholesaler originated $3.4 billion — plunging from $9 billion in the fourth quarter, according to a conference call by parent General Electric Friday.

“We curtailed production dramatically during the first quarter,” said Mark Begor, president and chief executive officer of GE Money, Americas, in the call. “We’ve tightened up a lot of our guidelines and really curtailed a lot of the business activities.”

For just March, originations were $0.5 billion, Begor indicated.

He explained that the model to fund subprime and Alt-A loans for brokers and then sell them to Wall Street worked until the fourth quarter, when capital markets stopped buying the mortgages because of home price appreciation declines and increased delinquencies.

The Burbank, Calif.-based company has “fixed” underwriting to its own guidelines and “no longer writing to Wall Street guidelines,” he added. WMC has increased pricing and no longer originates stated income loans and mortgages with loan-to-values greater than 85.

The rate of loans past due 30 days or more at WMC was 5.15 percent, unchanged from the fourth quarter and down from 5.25 percent in the first quarter a year ago, according to call’s corresponding slide presentation. One executive said 60-plus-day delinquency was about 50 percent higher in subprime loans than in Alt-A loans but that the latter loan category is seeing pressures.

WMC showed a net loss of $373 million for the first quarter — $330 million was due to additional reserves put on its balance sheet for the 4.5 billion loans it holds and for potential future repurchases of loans previously sold to investors. On a pretax basis, the increased reserves amounted to $500 million. Currently, it has $700 million in reserves on its balance sheet for protection going forward, Begor said.

“We do feel like we have a fence around the issue with the first quarter reserves,” Begor said.

Among factors helping WMC are that there are less competitors in the market, it has put a time limit of 180 days for the return of loans and is “right-sizing” the organization, the company said in the call.

The nonprime wholesale lender reduced its workforce by 20 percent — or 450 employees — on March 8 and laid off an unspecified number later that month.

next story

back to current headlines

Coco Salazar is an associate editor and staff writer for

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.

Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

The Mortgage Graveyard 2018 Archives

The Mortgage Graveyard 2018 Archives Failed, Struggling and Acquired Mortgage-Related Companies Non-Bank Closures 3 Bank Failures (FDIC) 0 Credit Union Failures 0 Total Mortgage-Related Failures 3  

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

MBS Statistics

MBS Statistics Non-Agency Issuance 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Private Label RMBS Issuance (S&P) $80 billion to $100 billion (est) $70 billion $34...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Sample E-Mail

Sample E-Mail   Covering the Real Estate Finance Since 1999  Mortgage Industry News free news content | view headlines online  Advertorial Text Ad This ad includes a linked bold headline of up to 50 characters and up to 100 words of text. The ad can be...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI