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Servicer Rating Lowered at Goldman Unit

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The subprime mortgage servicing subsidiary of Goldman Sachs was hit with a servicer rating downgrade.

The unit, Litton Loan Servicing, is a wholly owned subsidiary of Goldman Sachs Bank USA — which itself is an indirect subsidiary of The Goldman Sachs Group Inc.

The downgrade came Friday from Moody’s Investors Service.

According to the ratings agency, Litton’s servicer quality rating as a primary and special servicer of subprime residential loans was cut to SQ2+ from SQ1-.

The best possible servicer rating is SQ1+, and the worst rating is SQ5-.

Moody’s said that its assessment of Litton’s loss mitigation and timeline was reduced to “above average” from “strong.” The new assessment was the primary driver of the downgrade.

Litton serviced 308,770 loans for $48.4 billion as of June 30, Moody’s reported.

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