Ex-Employees: GE Ignored Subprime Warnings

    WASHINGTON, DC - JULY 11:  CEO of General Electric Jeffrey Immelt speaks to the media during the second annual jobs summit, on July 11, 2011 in Washington, DC. The U.S. Chamber of Commerce is hosting the Jobs for America Summit that will focus on the challenges and factors that influence job creation in a global economy.  (Photo by Mark Wilson/Getty Images)

    Mark Wilson / Getty Images

    Former employees of the fraudulent WMC Mortgage Corp. are coming forward with claims that General Electric Co. bought them out so it could profit from subprime mortgages. What GE came away from the bargain with was a hefty amount of cash, WMC employees say, as its staff pushed home loans on people who couldn't pay them back. WMC salespeople didn't necessarily need credentials—even former strippers and shoe salesmen could make money hawking subprime mortgages—but the best ones earned a million dollars a year or more. A former compliance manager at the company says sales reps often used falsified paperwork, forged income documentation, and other tricks to get their loans approved and sold to Wall Street investors. Employees say GE ignored warnings from WMC whistle-blowers as early as 2004 and made little effort to investigate the mortgage fraud. The industrial giant lost more than $1 billion after shutting the lender in 2007.

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