GE to "vigorously contest" mortgage lawsuit

Published September 07, 2011

| Reuters

BOSTON (Reuters) - General Electric Co <GE.N> said it would "vigorously contest" a lawsuit by the Federal Housing Finance Agency, which said the conglomerate's former WMC unit made inaccurate statements about the sale of two residential mortgage-backed securities.

GE was one of 17 large banks and financial institutions sued on Friday by the FHFA, which oversees Fannie Mae <FNMA.OB> and Freddie Mac <FMCC.OB>, over losses on $200 billion of subprime bonds.

Fairfield, Connecticut-based GE said in a statement on Wednesday that the two transactions federal regulators are questioning amounted to $549 million and that $66 million in principal remain on them.

GE sold the WMC subprime mortgage lending business in 2007.

Other big financial institutions targeted in the suit include JPMorgan Chase & Co <JPM.N>, Royal Bank of Scotland <RBS.L> and Bank of America Corp <BAC.N>, including its Countrywide and Merrill Lynch arms.

(Reporting by Scott Malone; Editing by Lisa Von Ahn)

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