Goldman Sachs Mortgage Chief Quits
The head of Goldman Sachs Group Inc.'s (GS) mortgage department unexpectedly quit on Friday, according to a report in the Wall Street Journal. Dan Sparks, who has been in the driver's seat at the Wall Street firm for roughly a year and a half but at Goldman for nearly 20 years, allegedly is "looking to do something different," the WSJ said, citing an unnamed source. Sparks oversaw a department that grew from one of the smallest at Goldman to one that plays more prominently in the company's revenue mix than it ever had before. Along with two key traders, Sparks helped Goldman bet against subprime MBS before the market for subprime paper literally imploded; one of the traders, Josh Birnbaum, recently left Goldman to launch his own mortgage-focused hedge fund. In particular, he orchestrated the purchase of Litton Loan Servicing LP from out of the wreckage of now-liquidating Credit-Based Asset Servicing and Securitization for an alleged $500 million -- a price that, we're told, was a steal. Industry insiders told HW at the time that Litton was the "crown jewel" of the C-BASS operation, and one of the best distressed mortgage servicers in the nation. Given where the market for residential mortgages now sits, Litton's value is likely well above its purchase prices, sources suggested. Sparks is likely to be replaced by two people form within the firm, the Journal reported: Justin Gmelich, currently head of U.S. credit trading, and Thomas Cornacchia, currently head of credit sales. Disclosure: The author held no positions in GS when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.