We wondered not so long ago whether Goldman Sachs (NYSE: GS) had come to regret its purchase of Litton Loan Servicing back in December 2007. It's been a headache, that's for sure. And the mortgage servicer doesn't seem to offer much in the way of synergies any more. We're not sure it ever did. It's numbers were small and you have to wonder if it would have ever have grown into a major source of product for Goldman's securitization and CDO machinery. That's a moot issue now, of course.

We joked recently that it's a good thing the firm never rebranded the unit--Goldman Sachs Mortgage Servicing just doesn't sound right. All in all, we shouldn't be surprised by the scoop in the Financial Times that Goldman is interested in selling the fourth largest domestic servicer.

Apparently, at least one prospective buyer approached Goldman about a deal. However, the talks fell apart over valuation issues, and there is no deal imminent as of this moment. But that could change quickly as word seeps out that the Houston-based unit is on the block. It may prove to be hard to sell, as the firm's reputation is not pristine and there's a big cloud over mortgage servicers right now. The regulatory climate is quite uncertain as the foreclosure fiasco muddles on.

For more:
- here's the article from Zack's

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