Feds Reportedly Investigating WMC Mortgage For Fraud

Feds Reportedly Investigating WMC Mortgage For Fraud The U.S. Department of Justice and the Federal Bureau of Investigation have launched a fraud probe of General Electric Co.'s (GE) former subprime mortgage unit, WMC Mortgage Corp. in Burbank, Calif.

According to a Los Angeles Times report, ‘four people with knowledge of the investigation’ claim that the federal probe is focused on potential criminal business practices at WMC during the height of the housing bubble. Among the issues being investigated is whether WMC used intentionally incorrect financial documents to originate loans and whether senior management allowed fraudulent loans to be sold to investors.

‘It's mostly about: Did they knowingly sell mortgages into the secondary market that they knew were fraudulent?’ said one unidentified person cited by the Los Angeles Times.

Spokespersons for the federal agencies reportedly investigating WMC declined to comment on the news. A GE spokesperson stated that allegations of WMC selling fraudulent loans to the secondary market were false.


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