Sub-prime giant culls jobs

Hurt by delinquent sub-prime loans, General Electric-owned WMC Mortgage has slashed 500 jobs - including most of is junior account executive sales force.

A WMC spokeswoman confirmed that layoffs had occurred last Thursday, at the same time as its chief executive Laurent Bossard testified before the Senate Banking Committee in Washington on conditions in the US sub-prime market.

However, she would not provide a headcount or job types. Junior AEs assist senior AEs who gather mortgages through loan brokers in the wholesale channel. Most of WMC’s production is wholesale.

WMC, a non-depository, is the fourth largest sub-prime funder in the country.

Several top executives have left the company in the past few weeks including its operations chief. During this time, WMC closed offices in Bellevue, Washington, Boston, Chicago and Florida. Remaining are locations in Burbank, California (its headquarters), Dallas, and New York.

The latest jobs cuts were revealed to Mortgage Strategy by industry sources. A few weeks ago, WMC laid off 460 employees.

One former employee who was recently laid off and requested an-onymity told Mortgage Strategy that president and chief executive Bossard said in a recent sales call with AEs that he wished the company would not receive any loan files for 90 days because Wall Street firms are not buying product.

The WMC spokeswoman said she would not comment on what she called “second-hand information”.

The former employee also claims WMC is now relying on financing from a GE unit. The spokeswoman declined to comment.

Loan traders say that in recent months, WMC has been trying to sell delinquent second liens in the ‘scratch and dent’ secondary market but has baulked at some of the prices being offered.

Sources say that instead of selling bad loans at a discount, WMC has placed some of these deals – believed to total hundreds of millions of dollars – on the books of GE. The spokeswoman would not address this issue.