WMC Mortgage Reaches Settlement With Five Banks Over Claims (Corrected)

Bankrupt WMC Mortgage LLC reached a settlement with five of its largest unsecured creditors, clearing the way for confirmation of its liquidation plan.

The subprime mortgage originator, a subsidiary of GE Capital, filed its agreement with the banks—HSBC, RBS, Barclays Capital Inc., Morgan Stanley, and Wells Fargo Bank NA—with the U.S. Bankruptcy Court for the District of Delaware on Oct. 30.

The five financial institutions contract parties with WMC, had claimed they were owed more than $450 million as a result of buying and securitizing pools of WMC’s residential mortgages. Under the agreement, the five creditors would reduce their allowed ...