Mortgage Problems Crimp GE Earnings

Mortgage delinquencies in the financial services division of General Electric are high and continuing to climb but the rate of increase appears to be slowing. The 13.38% 30-plus-day mortgage delinquency rate seen in the GE Capital Finance unit's managed assets during the third quarter is only slightly higher when compared to 13.23% in the second quarter. But it is up notably from 9.22% during the third quarter last year. GE Capital is a key concern for GE given that the company said falling revenue from that unit was "primarily" behind a year-to-year reduction in the company's total revenue and earnings. Every segment at GE Capital except real estate was profitable during the quarter. GE chairman and chief executive officer Jeff Immelt described the real estate concern as the result of a "tough environment but [one] where we believe the risks are well understood and manageable." The company said it is "preparing GE Capital to be a smaller, more focused franchise." Overall, GE's earnings in the third quarter dropped to $2.4 billion from $4.3 billion during the same period a year ago.