The Mortgage Lender Implode-O-Meter News Pick-ups: Imploded: WMC

Update, 2007-12-26

Per their web site, "WMC Mortgage is no longer accepting wholesale loan submissions."

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.]

robbedbythesecrooks at 00:17 2009-09-27 said:

I honestly can't believe that there hasn't been any posts about WMC/GE. I think all of their former employees were hoping for a long time that they would all be rehired as GE successfully laid everyone off, kept telling everyone they were selling the company, and eventually shut it down after a year of jerking everyone arround. Amazing how these large companies manage to keep all of their layoffs and mistreatment of employees out of the news.

When WMC/GE laid off a majority of their employees in April 2007, they technically kept them employed for 2 more months, but would not allow them to bring in any business, thus no commission was available. A majority of these employees were 100% commission and because GE kept them employed for 2 more months, they were ineligible for unemployment benefits and could not make any money at GE because they weren't allowed to bring in any new business. GE then must have been afraid of a lawsuit, so they sent the employees out checks based off of what their peer group made during those 60 days.....remember no one was making anything because they weren't allowed to bring in any business....so for an example, my check for 60 days was for $247.00.....coincidentally my take home from unemployment would have been over $600/wk....

For a company that preached employee loyality and how great it was to work for GE, I guess it really shows in the end how disposable corporate america considers its employees and how the large corporations continually manipulate the system..... Permalink