GE Will Fined US $ 1.5 Billion For Harming Subprime Mortgages

General Electric

GE, -0.74%

will pay a civil fine of $ 1.5 billion on subprime mortgages, the Department of Justice announced Friday. WMC Mortgage, a subsidiary of GE, and GE itself "misinterpreted the quality" of WMC's loans, as well as the quality controls of GE's mortgage bonds, the DOJ said in a paper. "The lack of disclosure of the material deficiencies of these loans has contributed to the financial crisis," said Deputy Attorney General Jody Hunt in a statement. The DOJ relied on the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to plead its case against GE, which did not acknowledge its responsibility in reaching the settlement with the government.

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