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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

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Wednesday, March 16, 2011

Goldman Sachs and Litton Loan Servicing

Goldman Sachs's opportunistic moves do not always pan out. Take Litton Loan Servicing which Goldman bought in 2007 when it was trying to obtain as many sub-prime mortgages as it could in order to concoct those CDOs that it foisted on unsuspecting buyers before the financial meltdown in 2008. Goldman Sachs is now considering selling this company.

I do not wonder why they are selling it: Litton serviced $9.7 billion in mortgages and had a delinquency rate of 43% in 2009. Goldman Sachs halted 23,000 foreclosures in order "to sort out affidavits that were signed without a review of the documentation."

Goldman Sachs's actions surrounding Litton lie at the heart of the fraud that Goldman Sachs perpetrated, not only on the homeowners of the US but also on the pensions and savings funds that bought the highly rated CDOs that Goldman Sachs touted.

Goldman Sachs had to buy a less-than-sterling company in the hopes of keeping its CDOs rolling along and raking in the money but Litton proved to be a horror show for hundreds of the homeowners who were caught in its snare. Customers who were unfortunate enough to buy their mortgages through Litton have a great deal to complain about. See the hundreds of complaints against Litton listed here.

It would be too bad if Goldman Sachs was allowed to sell this big loser of an investment before it settled all its underlying foreclosures and delinquencies that have contributed to The Great Recession.

I wonder if anyone at Goldman Sachs even gives a damn about the pain of any homeowner who used Litton Servicing!

Goldman Puts Mortgage-Servicing Unit Up for Sale
by Michael J. De La Merced - DealBook

Goldman Sachs has put its mortgage-servicing subsidiary, Litton Loan Servicing, up for sale amid continued concern over whether borrowers were improperly evicted from their homes.
“Goldman Sachs is exploring strategic options for Litton Loan Servicing, which include a possible sale,” a firm spokesman, Michael DuVally, told DealBook in a statement.
The process is at an early stage, and Goldman has begun contacting potential buyers, according to a person briefed on the matter, who spoke on condition of anonymity because a deal may not materialize.
The firm bought Litton in 2007 from C-BASS, a subprime mortgage investment firm, with the hopes of buying up portfolios of mortgages that the business could then service. The move was part of Goldman’s effort to buy up distressed assets at attractive price.
But those opportunities largely did not surface.
Litton halted foreclosures in October amid criticism over how the loan-servicing industry processed those documents. Lenders have been criticized for their rush to evict delinquent borrowers, amid reports that many such foreclosures were based on incomplete or shoddy paperwork.
In recent weeks, however, Litton has resumed its foreclosure operations.
Read the article here

2 COMMENTS:

Anonymous said...

@.."I wonder if anyone at Goldman Sachs even gives a damn about the pain of any homeowner who used Litton Servicing!"



Watch both videos but the second gives you your answer!

Jeffrey Sachs: The New Robber Barons

http://www.ritholtz.com/blog/2011/03/jeffrey-sachs-the-new-robber-barons/

Anonymous said...

Litton is regulated by the Federal Reserve, at least for their efforts in NC. However, if you want to rattle a cage or two at Litton, you can use the following addresses:

Executive Resolution Team
Litton Loan Servicing, LP
P.O. Box 570848
Houston, TX 77257-0848

and

Board of Governors of the Federal Reserve System
Consumer and Community Affairs Division
20th and C Streets NW
MS 801
Washington, DC 20551

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