A remnant of the subprime mortgage lending boom, WMC Mortgage LLC, filed for bankruptcy yesterday to wrap up its final affairs a dozen years after shutting down operations and facing an onslaught of legal trouble, WSJ Pro Bankruptcy reported. A home lender for decades, WMC made subprime home loans on a wholesale basis as a subsidiary of GE Capital Corp. between 2004 and 2007, helping to fuel the mortgage-industry meltdown that unsettled the global economy, court papers said. The loans WMC produced in part backed the packaged securities that were sold to Wall Street and whose value plummeted during the subprime mortgage crisis. Chapter 11 bankruptcy will allow WMC to end remaining legal threats, court papers say. Despite billions of dollars worth of settlements, WMC is still being hit with legal fallout, such as claims for indemnification by others involved in the risky home loan debacle, according to court filings. WMC recently was part of a $1.5 billion settlement between the U.S. Department of Justice and General Electric Co. that ended a long-running probe into alleged subprime mortgage accounting violations. WMC was accused of misrepresenting the quality of the loans it produced. The Justice Department settlement contained no admission of wrongdoing. The case is In re WMC Mortgage LLC, U.S. Bankruptcy Court, District of Delaware, No. 19-bk-10879.
