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GE vows vigorous defense against federal lawsuit over mortgaged-backed securities
NEW YORK (AP) ' General Electric Co. said Wednesday that it will vigorously defend itself against a lawsuit filed by the Federal Housing Finance Agency over $549 million in mortgage-backed securities the company sold to Freddie Mac in 2005.
The federal agency sued 17 financial institutions including GE and some of the nation's largest banks on Sept. 2. The agency oversees Fannie Mae and Freddie Mac, the agencies that buy mortgages and mortgage securities issued by lenders.
GE and the others are accused of making inaccurate statements in documents when selling Fannie Mae and Freddie Mac mortgage-backed securities, which are bundled pools of mortgages. Many turned toxic when the housing market collapsed.
The lawsuit against GE involves two mortgage-backed securities backed by loans originated by WMC Mortgage Corp., a business GE sold in 2007.