Magazine article American Banker

Goldman Seen Paying about $500M for Litton

Magazine article American Banker

Goldman Seen Paying about $500M for Litton

Article excerpt

Goldman Sachs Group Inc. is expected to buy Litton Loan Servicing LP of Houston from C-Bass LLC for roughly $500 million, a source familiar with the investment bank said Wednesday.

It is unclear what would become of the rest of C-Bass, a New York joint venture of MGIC Investment Corp. and Radian Group Inc. that invests in subprime home loans and lower-rated mortgage backed-securities, after the sale.

Litton services about $58 billion of mortgages. C-Bass is in default to several lenders after failing to meet margin calls since late July.

Neither C-Bass nor Blackstone Group, its adviser on the effort to sell Litton, returned calls seeking comment.

Like other investment banks that trade mortgage-backed securities, Goldman is trying to build a vertically integrated mortgage business. It has a small Irving, Tex., residential servicing unit, Avelo Mortgage LLC, and in February it bought Senderra Funding LLC, a Fort Mill, S.C., originator.

Fannie Mae apparently has dropped out of the bidding for Litton.

"We are not pursuing an acquisition" of either Litton or C-Bass, Marilyn Kornfeld, a spokeswoman for the government-sponsored enterprise, said Tuesday afternoon. However, she would not say whether Fannie hadpursued such an acquisition at any point.

American Banker reported Tuesday that industry sources had identified Fannie and Goldman as potential buyers of Litton. When the paper contacted Fannie before publishing the article, the GSE would not discuss the speculation. …

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