BUSINESS
09/07/2011 09:47 am ET Updated Nov 07, 2011

General Electric Plans To 'Vigorously Contest' Mortgage-Backed Securities Lawsuit

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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