Morgan Stanley and Goldman Sachs Bury Their Dead
In todays Wall Street Journal, it was announced that Morgan Stanley would off-load its mortgage servicing unit known as Saxon Mortgage for $59.3 million, a whopping $646 million loss over the the price the investment bank paid for the mortgage mill in 2006 at the top of the bubble.
Goldman Sachs bulked up on subprime mortgage mill at the top bubble December 2007 with its purchase of Litton Loan Services, a company that specializes in collecting debts on high risk mortgages near default for $430 million. In September 2011, Goldman unloaded Litton for $264 million for a $166 million loss, but that did not include the $60 million settlement Goldman had to pay 700 Massachusetts mortgage holders for foreclosing on a bankrupt subprime lender, Fremont Investment & Loan.
As the masters of the universe stumble in their greed, a common threat revealed itself. Goldman Sachs and Morgan Stanley, who would not be in busines without taxpayer bailouts, central bank interventions and mutiny over the shareholders they were supposed to serve both sold their mortgage problem children to Ocwen Financial Corp.