We have speculated about buyer's remorse for several deals, such as Bank of America's purchases of Merrill Lynch and Countrywide, and JPMorgan's purchase of Washington Mutual. The debate rages about whether the deals were worth it in hindsight. When it comes to Goldman Sachs' deal for Litton Loan Servicing, one would have to conclude that mighty Goldman made a dumb move.

"Litton is fairly small, ranking No. 22 in the country, with about $50 billion in loans outstanding, according to Inside Mortgage Finance," reports Crain's. "But Litton deals with a particularly default-prone crowd. It is the nation's fourth-largest servicer of sub-prime home loans, according to National Mortgage News. That means it faces a potential wave of court challenges to its foreclosure practices that could cost it--and Goldman--big," Crain's notes.

In addition, Moody's now says it may downgrade Litton. To be sure, buying mortgage servicers was all the rage at one point. But the contrast in cultures were extreme; Litton never had a great reputation--as evidenced by its spotty customer service record--whereas Goldman Sachs once enjoyed--and still does--a golden reputation. It's not quite like Goldman getting into the bail bond business but you get the idea.

Still, Litton represents little risk to Goldman, as it's just too small to matter. Good thing they never rebranded it Goldman Sachs Mortgage Servicing--which just doesn't sound right. But it does sound a lot better than Goldman Sachs Bail Bonding.

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