My son had to have the doctor cauterize his for this same reason. He had a granuloma, basically the stem cells in the umbillical cord base kept growing tissue so it looked exactly like this. Doctor treated it once,( painless for baby) and now he has the cutest little belly button ever :)
Belly button
My daughter took her barley attached belly button - umbilical cord off at 6 days old now at 13 days old it still bleeds and runs and stains her close. Is this normal with my son I don't remember it bleeding or anything after he lost it! 

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