GE's subprime mortgage unit files for bankruptcy

WMC Mortgage, a defunct subprime lender that GE Capital acquired during the housing boom, filed for bankruptcy on Tuesday. The Chapter 11 filing, a rare step by a major company, comes just weeks after GE agreed to pay a $1.5 billion fine over WMC, a leading subprime lender that was shut down in 2007. News of the bankruptcy was reported earlier by Reuters.

Buying high, selling lowGE emphasized that neither the parent company nor GE Capital are part of the filing and the case has"no adverse impact on our business operations."GE has previously said in filings that putting WMC into bankruptcy could allow the company to no longer consolidate WMC's financials into the parent company. That could help make GE's balance sheet look healthier. However, GE also said that a WMC bankruptcy would increase legal and administration expenses.

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