first_img April 12, 2019 1,342 Views Demand Propels Home Prices Upward 2 days ago Tagged with: Department of Justice DOJ GE Subprime Lending  Print This Post Demand Propels Home Prices Upward 2 days ago The U.S. Department of Justice (DOJ) announced on Friday that General Electric will pay $1.5 billion to end the DOJ’s claims over subprime home loans that have been bundled into risky securities.According to the DOJ, GE misrepresented the quality of its subprime loans through its former mortgage business, WMC, and will pay its penalty under the under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).“The financial system counts on originators, which are in the best position to know the true condition of their mortgage loans, to make accurate and complete representations about their products. The failure to disclose material deficiencies in those loans contributed to the financial crisis,” Justice Department Assistant Attorney General Jody Hunt said in a statement.“As today’s resolution demonstrates, the Department of Justice will continue to employ FIRREA as a powerful tool for protecting our financial markets against fraud,” Hunt continued.“This settlement contains no admission of any allegations and concludes the FIRREA investigation of WMC,” a GE spokesperson said in a statement to CNBC. “This is another step in our ongoing efforts to de-risk GE Capital. This agreement represents a significant part of the total legacy exposure associated with WMC and we are pleased to put this matter behind us.”According to the DOJ, WMC originated more than $65 billion dollars in mortgage loans between 2005 and 2007. According to a member of GE’s Corporate Audit Staff (CAS) involved in audits of WMC observed in April 2007, WMC “jacked up volume without controls,” leading to WMC receiving more mortgage applications containing fraud or other defects than its competitors.The DOJ alleges that by late 2005 and early 2006, investment banks were kicking out more of WMC’s loans than ever, and after a review in March 2006, WMC found that 78 percent of the loan files reviewed contained at least one piece of false information. Previous: Best Homes Title Rolls Out New Website Next: Wells Fargo, JPMorgan Chase Weigh In on Bank Performance Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago GE’s $1.5B DOJ Subprime Settlement Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer. The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days agocenter_img Department of Justice DOJ GE Subprime Lending 2019-04-12 Seth Welborn Sign up for DS News Daily Subscribe About Author: Seth Welborn Related Articles Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Share Save The Week Ahead: Nearing the Forbearance Exit 2 days ago in Daily Dose, Featured, Government, Journal, News Home / Daily Dose / GE’s $1.5B DOJ Subprime Settlementlast_img

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