Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Goldman’s foray into subprime

By Suzanne Kapner and Francesco Guerrera in New York

Published: June 16 2010 00:01 | Last updated: June 16 2010 00:01

As ever-darker clouds have gathered over Goldman Sachsin recent months, its executives have relied on a consistent line of defence.

As regulators, congressional investigators and activist shareholders have accused Wall Street’s most successful investment bank of putting its interests ahead of those of its clients, Goldman’s response has been: we deal with sophisticated investors who ought to know how to look after themselves, not powerless individuals.

“We don’t have banking branches . . . we provide very few mortgages and don’t issue credit cards or loans to consumers,” is how Lloyd Blankfein, Goldman’s chief executive, summarised the bank’s modus operandi in a recent appearance before a US Senate subcommittee.

Yet, in one small corner of its domain, Goldman interacts directly with ordinary Americans. Through its wholly owned subsidiary Litton Loan Servicing, which is facing a wave of complaints from consumers, Goldman collects payments on 320,000 loans, mainly in California and Florida, with an unpaid principal balance of $50bn.

US customer complaints against mortgage servicing companies*
June 2010

Value of loans being serviced

Complaints in past 36 months

Litton Loan Servicing$50bn794
Saxon$35bn631
American Home Mortgage$100bn597
Ocwen$50bn521
HomEq Servicing$28bn161
Source: Better Business
*Selected

When Goldman acquired Litton in December 2007 for $430m, the deal attracted little attention. Compared with Goldman’s $45bn in annual revenue, Litton is tiny. Goldman says Litton services half of 1 per cent of US mortgages.

The high-risk mortgages serviced by Litton were like the many loans Goldman – and its rivals – packaged into complex securities that plunged in value once the housing bubble burst, leading to huge losses among investors.

Goldman’s knowledge of the perilous state of the US property market, and its alleged reluctance to share it with investors, is at the centre of civil fraud charges filed by the Securities and Exchange Commission – which the bank denies – and were the focus of an 11-hour grilling of Goldman executives by Senate investigators in April.

Founded in 1988 by Larry Litton Sr in Houston after the Texas real estate bust, Litton developed expertise in collecting payments on high-risk mortgages that were near default. The company was purchased in 1996 by Credit-Based Asset Servicing and Securitization (C-Bass), which bought troubled loans from banks and used Litton to restructure them.

Because of its focus on distressed borrowers, Litton was one of the first companies to experiment with reducing interest payments for customers who had fallen behind to keep them from losing their homes. Such “loan modifications” have become common practice.

Litton’s focus on modifying loans, coupled with its relationship with C-Bass, gave it an edge over rival servicers.

Because C-Bass bought bonds that were backed by pools of mortgages, Litton had the right to modify those loans once they soured.

According to Moody’s Investors Service, Litton has retained the right to modify loans in 95 per cent of the securities backed by loans it services. In contrast, other servicers have been blocked and even sued by investors, who claim loan modifications violate the original contract terms.

“Litton has been more aggressive than some of the other servicers,” said Alan White, an assistant professor at the Valparaiso University School of Law. “It’s part of their culture.”

That approach has at times incurred the wrath of consumers. Concerned about rising complaints against the company, the Houston chapter of the Better Business Bureau conducted an investigation in 2005. “They were arrogant,” said Dan Parsons, president of the Houston chapter. “It was all about how much money they could make.”

The bureau voted to revoke the company’s membership but Litton resigned before it could act.

Larry Litton Jr, current chief executive of the servicer, told the Financial Times the resignation was prompted by a failure of the bureau to fully grasp its business strategy.

He added that Litton had long been an advocate of restructuring consumer debt.

“We do it because it’s a good financial decision for investors, but also because it’s a good outcome for consumers,” Mr Litton said.

When C-Bass ran into financial trouble in 2007, Goldman snapped up Litton. Goldman said it has extensive procedures in place to ensure that information from Litton is not used inappropriately.

A person familiar with the situation said Mr Litton did not report directly to Mr Blankfein or Goldman’s senior management, but interacted with lower-level mortgage executives.

After buying Litton, Goldman took pains to operate the company separately from its trading and advisory business and does not use Goldman branding on Litton’s marketing materials. Such distance is in keeping with Goldman’s desire to be seen as a Wall Street firm that deals with high finance only.

Many Litton customers did not realise the mortgage servicer was owned by Goldman. Marla Vasquez, a disgruntled customer in California, said she learnt about the SEC investigation from a radio broadcast. “It surprised me Goldman owns a company like this,” she said.

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High level discussions at GOLDMAN discussed letting LITTON GO!
 
GOLDMAN being caught in the cross hairs of growing litigation, and significant additional exposure due to Litton Loans continued litigation exposing more and more about its inner workings is now reaching the upper sanctum of Goldman, the 60 million to the state of MA as a settlement for Litton Loan was just a drop in the bucket to Goldman, but that drop has the potential to become a serious drain on Goldman, as well as contributing to its continued negative perception by the public. 
 
This year could see Litton Loan being spun off from Goldman, if a buyer can be found, if not, it could be shut down!  I like the shut down myself!
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oh yeah...
I'm afraid if Goldman lets Litton go, another bottom feeder will take it's place.  After all, this is a quite profitable business.  There are alot of people in this world who don't mind running a corporation that exercises unethical business practices.

Now on the other hand, it would give those at Litton the karma that they so rightfully deserve!

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JohnH
Goldman had better take notice and start to get more hands on with it's red headed stepchild Litton Loan Servicing. I know of several lawsuits against litton that are going to trial this year...........I promise you they are going to be made VERY public!............Goldman, you have been warned!

John.

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Vincent
I can't wait to see Litton scum go down in flames!

Vinny.

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Vinny,

I am with you on that. But I think you mean "go up" in flames. Ha,Ha
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The Equitable One
Vincent and CMC,

Either of you are correct.

Personally I don't care if Litton goes up or down in flames as long as some heat and finality are involved.

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I agree up or down in flames for litton loan.How about both ways?

I contacted litton several months back by a Respa that was only answered when my attorney sent them a letter.Why is it they can`t answer your Respa until they are contacted by an Attorney at you expense and then they say we have found your letter?

Litton Loan told me in a letter that they only had to answer questions pertaining to their servicing of my loan and to contact the originator of the loan for anything pertaining to origination papers etc.I did by Respa contact the originator of my loan with the origination loan number and they answered me by saying no such loan number exist and to send them the correct number if I wanted any information to pertaining to the origination of my loan.

My loan originator went out of business 10 months before litton started servicing my loan when it was allegedly transfered to them,10 months after the fact of them going out of business.It seems that the company that went out of business that originated my loan should have had to transfer my loan while it was still in business to be a valid transfer,not 10 months after closing down?Also litton faxed a copy of the mortgage and note with forged signatures and these copies were so faded you can`t read them in places and litton tells me who the alleged note holder is but wont give any information on their address or alleged loan number to contact them.

The Gov`s office of financial instatutions has my originator as closed effective 10 months before litton loan`s alleged transfer of my loan to them.Also litton loan will not show any transaction history on my monthly statements (i.e.We are unable to display any transactions that may have occured since the last statement date at this time)

Also missing 1098 forms and their failure to refund me any escrow overages at the yearly endings of anything over the $50.00.My online account information is not avalible and litton loan claims to be servicing my mortgage according to the original terms.These filthy corrupt liars.Litton Loan owes me over $4000.00 just in escrow overage and it dont do any good to contact the government because they are as bad as litton loan as in ignoring you.

Litton completely some months will not send out statements and the last 4 years has no transaction history on the ones that I do have.

I am completely fed up with these terrorist and that is exactly what they are.Criminals trained in fraud and professional liars who will never say they are in the wrong and yellow belly COWARDS who can`t sign their name to let you know with whom you are speaking with in the mail.I will never wast my time on the phone with these yellow belly cowards again only by mail and certified at that.

I do think its all about to cave in for them and shortly.Damn fatherless and motherless bastards who are not human in any form but are of their father the devil who are damned low belly demons lower than the belly of a rattle snake,right out of the pit of hell.

I would like to have 5 minutes with mr larry sr and jr.I promise they would be spending their fortune to recover from being badly broken up and I would pull each tooth with a hammer and screw driver.Yes they deserve no-less right along with each employee.Their greed is about to destroy them,just watch.

Every litton loan victim needs to band together and martch on washington and at 4828 loop central drive in houston tx with walking tall sticks and ball bats.



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CHRIS WYATT GONE FROM LITTON LOAN
 
May of us know Wyatt as the corporate Representative of LITTON LOAN and took his deposition,   Well in March or April Wyatt was terminated from Litton Loan!
 
Wyatt seems to have a couple of problems, the first is his perjury on hundreds of depositions for Litton Loan, the second is Litton Loan its self, it seems Litton Loan is so concerned about Wyatt, that they obtained his home mortgage and is foreclosing on him, in an obvious attempt to keep him quiet.
 
Chris began his career at Litton Loan as a Para legal for the Corporate Counsel, he then began to be used as Litton's corporate Representative for defending Litton Loan in depositions.  Chris became very good friends with Larry Jr. and Sr. and visited there homes often, he rose to an Administrative Vice President, and received bonus in excess of 50,000.00 Chris was so close to both Larry's that it was rumored that he wanted to name his son after "Blake".
 
Well now the fall from grace,  Chris's life is nearly an entire lie!  He is not who he said he was or is under oath!
 
If your case included depositions of Wyatt, you may talk with your lawyers and revisit those depositions, Wyatt knows where the bodies are buried, he now has much more to lose for perjury.  As a para legal to the General Counsel he has opened to the door to depose her!
 
Wyatt life is now a mess, and is coming undone, and Litton Loan can no longer protect him, Wyatt knows that Litton did not apply payments, he also knows that they "intentionally" with held payments, and reported false credit and payment history!
 
Go Get his deposition now!!!  He can only tell the truth now, because if he lies now it could mean jail time!
 
HEY FEDS, AND STATE AG'S  GO GET CHRIS WYATT,
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What is up with loan modification.

I applied for a modification after falling behind I sent all the paperwork at the end of July.  Still in Review.  I got a call on Monday that they needed some proof of employment.  I had already sent them paystubs for May and June.  but lady sayd they need current ones.  I sent them in alonmg with our employment contract.  Now Im being told I did not send the required papers in time.  The date of the letters are 9/27, and that is the same day she called.  This is confusing.  I thought if it is not approved they would off a different solution to keep my home.  I sent them the paperwork when they asked for it.

Please Help.
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Hey Guys,

Rumor is that Christopher Wyatt is opening his own consulting firm. 

Could he be consulting with any Attorneys General??????

With all the depositions he did for Litton, it wouldn't be a bad idea.

Anyone hears anything about ol' Chris, please let Gary Wait know.

Best to all.  We're still fighting.

Bob
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