GE quits subprime game

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Worth noting: GE, generally regarded as a pretty smart outfit, is quitting the subprime mortgage business.

Business Week: ‘GE said it was exiting the subprime mortgage business, after taking writedowns of $500 million in assets in the first quarter and $182 million in the second quarter. The announcement comes just days after Moody’s Investors Service downgraded $5.2 billion in subprime mortgage debt, including loans underwritten by GE’s WMC Mortgage Corp. GE said it sold $3.7 billion of loans during the second quarter.

The Times of London online: ‘General Electric became the latest group to admit defeat in America’s subprime home loan market as it announced plans to sell its WMC Mortgage unit.... The sale would bring the number of mortgage lenders that have closed, gone into bankruptcy or been sold to more than 60 in the past 18 months as a trickle of defaults on high-risk subprime mortgages has turned into a flood.’

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