Can this servicer clusterbomb get any worse?
NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) has moved closer to offloading Litton Loan Servicing, with Ocwen Financial Corp (OCN.N) leading in an auction to acquire the troubled mortgage business, sources familiar with the situation said this week.
A deal, however, has not been reached yet, so talks could still fall apart.
While Litton is not a large component of Goldman's operations, divesting the business would close an unpleasant chapter for the Wall Street bank.
Goldman bought Litton in 2007 for about $430 million, hoping to glean more information about the housing market to aid its mortgage-bond trading business. Shortly after the deal closed, the subprime housing market fell into shambles.
High levels of delinquencies and foreclosures have cut into profits of many servicing businesses. In recent months, sloppy foreclosure practices have also attracted regulatory attention and bad publicity.
Goldman began considering a sale of Litton late last year, and in the first quarter it took a $220 million writedown related to the business.
In a regulatory filing, the bank said it expected to sell Litton within a year and was cooperating with requests for information from regulators and state attorneys general about its foreclosure practices as part of a nation-wide probe.http://news.yahoo.com/s/nm/20110520/bs_nm/us_litton_ocwen;_ylt=Al5IpVZ7BOvzgDxVhWoqvRy573QA;_ylu=X3oDMTJtNHJkNTViBGFzc2V0A25tLzIwMTEwNTIwL3VzX2xpdHRvbl9vY3dlbgRwb3MDMTgEc2VjA3luX3BhZ2luYXRlX3N1bW1hcnlfbGlzdARzbGsDb2N3ZW5pbmxlYWR0