Litton Loan Servicing has been sold — helping its troubled parent avoid bankruptcy.
Goldman Sachs has acquired the Houston-based company from Credit-Based Asset Servicing and Securitization LLC, according to an announcement Monday.
Terms of the deal were not disclosed.
The owners of C-BASS — MGIC Investment Corp. and Radian Group Inc. — announced plans to write off their combined $1 billion investments in the New York-based company during July. The company faced $260 million in margin calls in July alone.
Since that time, C-BASS has been scrambling to shore up liquidity — including hiring The Blackstone Group in August, according to yesterday’s announcement.
Fieldstone Mortgage Co., which was acquired by C-BASS in July, halted new business just a few weeks later. The company subsequently laid off idled workers and posted a message on its Web site that it has ceased accepting loan applications, is no longer funding loans and stopped accepting new broker applications.
On Friday, NoteWorld LLC issued a statement that its president and chief executive officer, Linda Remsberg, acquired the company from C-BASS. Note World claims to be the largest servicer of seller-financed notes.
The sale of Litton appears to have helped C-BASS stave off bankruptcy.
“The agreement provides a framework for the company to manage its portfolio assets, allowing the underlying cash flow to repay the secured and unsecured creditors of C-BASS over time,” Monday’s release from C-BASS stated. “The sale of Litton, a recognized industry leader in mortgage default management, was a key step for C-BASS … to reach a long-term agreement with its secured and unsecured creditors.”
