Mortgage Daily Logo

Goldman Agrees to Write Down Principal

Mortgage News

As a condition of selling its mortgage servicing subsidiary, Goldman Sachs has entered an agreement that requires it to write down principal on New York mortgages. The agreement also calls for the subsidiary to stop using faulty foreclosure affidavits and compensate borrowers who have been harmed by the affidavits.

The agreement was reached between New York’s Department of Financial Services and Banking Department and Goldman Sachs Bank, The Goldman Sachs Group Inc.-subsidiary Litton Loan Servicing LP, and Ocwen Financial Corp., a news release Thursday indicated.

New York-based Goldman acquired Litton in 2007 from Credit-Based Asset Servicing and Securitization LLC.

In June, Ocwen disclosed that it would acquire Litton from Goldman in a $264 million all-cash transaction. The deal, expected to close by Nov. 1, will boost Ocwen’s $74 billion servicing portfolio by around $41 billion and make it the 12th largest U.S. servicer.

The agreement with New York is required as a condition of the Litton sale.

The three firms will adhere to new “mortgage servicing practices,” according to the state.

Among “troublesome and unlawful practices” expected to be prevented through the agreement is robo-signing, where foreclosure affidavits are “executed by servicer staff without personal review of the borrower’s loan documents and were not notarized in accordance with state law.”

Any pending foreclosures where the faulty affidavits were used will be withdrawn, based on the agreement.

Other provisions of the agreement include the use of a single point of contact, reasonable pricing on any forced-placed insurance and the prohibition of using affiliated insurers where forced-placed insurance is used.

In addition, any borrowers who faced a wrongful foreclosure will be adequately compensated, while the application of loan payments will be adjusted to avoid the layering of late fees and the uses of suspense accounts will be restricted.

Goldman has also agreed to write down around $53 million in principal, which works out to around 25 percent of all 60-day delinquent home loans in New York serviced by Litton and owned by Goldman as of Aug. 1.

“Ocwen and Litton are immediately taking steps to implement these servicing practices,” the statement said. “Goldman, which is exiting the mortgage servicing business with the sale of Litton, has agreed to adopt these servicing practices if it should ever reenter the servicing industry.”

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

The Mortgage Graveyard 2018 Archives

The Mortgage Graveyard 2018 Archives Failed, Struggling and Acquired Mortgage-Related Companies Non-Bank Closures 3 Bank Failures (FDIC) 0 Credit Union Failures 0 Total Mortgage-Related Failures 3  

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

MBS Statistics

MBS Statistics Non-Agency Issuance 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Private Label RMBS Issuance (S&P) $80 billion to $100 billion (est) $70 billion $34...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Sample E-Mail

Sample E-Mail   Covering the Real Estate Finance Since 1999  Mortgage Industry News free news content | view headlines online  Advertorial Text Ad This ad includes a linked bold headline of up to 50 characters and up to 100 words of text. The ad can be...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI