Goldman Sachs says Litton has 'process issues' but underlying foreclosures sound
Goldman Sachs said Tuesday that it discovered some "process issues" with its foreclosures handled by its Litton Loan Servicing but said it believes the underlying foreclosures are still sound.
Litton had 23,000 foreclosures under way when it halted cases in some states last week to review its procedures, Goldman Sachs CFO David Viniar said during an earnings conference call with investors and analysts.
Earlier on Tuesday, Goldman earned $1.9 billion for its third quarter, down from $3.19 billion in the year-ago quarter.
The firm beat analysts' estimates, earning $2.98 a share, down from $5.25 a share in the year-ago period. The analysts' consensus was $2.32 a share.
Goldman (GS) bought Litton in December 2007 from subprime mortgage investor Credit-Based Asset Servicing and Securitization.
Litton has performed 80,000 permanent loan modifications since 2008, Viniar said.
The mortgage loan servicing firm suspended some foreclosures earlier this month to review how they were handled.
Several big financial institutions, including Ally Financial (GJM), Bank of America (BAC) and JPMorgan Chase (JPM) also suspended foreclosures.
Bank of America has since resumed foreclosures in 23 states.
Write to Kerry Curry.
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