Federal Reserve Bank of New York: We’re Looking at Goldman Sachs Mortgages
The Federal Reserve Bank of New York has begun looking into mortgage practices at Goldman Sachs (NYSE:GS) after The Financial Times received an anonymous letter from an employee saying that Litton Loan, a unit of Goldman, used to reject borrowers’ efforts to lower their loan payments through government programs without properly reviewing the applications. The whistleblower reviewed numerous applications that qualified for the programs and yet had been rejected.
Goldman (NYSE:GS) hasn’t commented on these recent allegations, but we do know that they have been trying to sell Litton since March because of concern that Litton was improperly evicting borrowers. Goldman originally acquired Litton in 2007 for the purpose of buying up mortgage portfolios, but that plan has backfired.
New York Attorney General Eric Schneiderman has already launched investigations into top banks like JPMorgan Chase & Co. (NYSE:JPM) and Deutsche Bank AD (NYSE:DB) for mortgage securitization practices, as well as bond insurers like MBIA Inc. (NYSE:MBI) and Assured Guaranty Ltd. (NYSE:AGO). Other attorneys general around the country have been launching their own investigations.