Litton, Goldman’s id
The apple, it seems, doesn’t fall far from the tree:
Litton Loan Servicing received more consumer complaints than any other loan servicer in the three years through June 2010, according to the Better Business Bureau. The 794 complaints against Goldman Sachs’ Litton led Morgan Stanley’s Saxon Mortgage at 631 complaints, American Home Mortgage at 597, Ocwen at 521 and Barclay’s HomEq at 161. The BBB gave Chase, Litton and Ocwen “F” grades due to the volume of complaints filed, their failure to respond and the seriousness of many complaints. Facing a BBB investigation in 2005 prompted by excessive complaints, the BBB voted to revoke Litton’s membership, but Litton promptly resigned. “They were arrogant,” said Dan Parsons, president of the BBB’s Houston chapter. “It was all about how much money they could make.”
I’m sure that Goldman has often regretted buying Litton, but I also get the feeling that it’s kind of their painting in the attic — the place where the dark Goldman id gets its fullest and most honest expression. Lloyd Blankfein was famously passed over for a job at Goldman before getting a job as a commodities trader at its J Aron subsidiary and rising stratospherically through the ranks; I wonder whether some dark genius at Litton will similarly manage to vault up to become senior Goldman management. After all, subprime mortgage servicing is just about the only part of the financial markets which is even more arrogant than commodities trading.