Is Goldman Hunting for a Platform?

Goldman Sachs & Co. may be shopping for a servicing platform as it readies the unveiling of its new, nonprime mortgage conduit, industry sources said.

As Mortgage Servicing News went to press this month, Goldman officials declined to comment on both its conduit plans as well as its appetite for a servicing operation.

Little is known about its conduit except that it intends to purchase subprime and alt-A loans from funders. Which firm will service the Goldman loans remains unclear.

Among investment banking firms, Goldman is late to the nonconforming party, a niche dominated by such Street firms as Lehman Brothers, which owns Aurora Loan Services of Colorado, and Bear Stearns which owns EMC Mortgage, Irving, Texas. (ALS and EMC service their own loans.)

Investment bankers say it makes sense that Goldman, if not now, eventually, would want a servicing platform for its conduit.

"The talk is that they want a place to park loans for a while," said one servicing advisor.

One possibility might be Provident Bancorp's subprime unit, PCFS Financial Services, Cincinnati, a $12 billion servicer. But one mortgage banker said the asking price is a bit too high at $2 billion.

Meanwhile, as MSN went to press, it appeared the market for bulk servicing portfolios was starting to pick up steam.

Investment advisors say First Horizon Home Loans, Irving, Texas, bought a $4.5 billion portfolio this past summer in a deal brokered by Countrywide Servicing Exchange, Pasadena, Calif.

Interactive Mortgage Advisors, Denver, was working on a few deals at press time, including a $800 million package of private-label alt-A servicing. Recently, IMA brokered a $1 billion bulk portfolio of conventional servicing.

"There's product out there," said IMA executive Tom Cronin, "but the market is tiered."

Other packages that traded this summer include a $400 million bulk deal belonging to Miami Valley Bank. Phoenix Capital, Denver, reportedly brokered the sale, but Phoenix officials did not return telephone calls about the matter.

Nexstar of St. Louis sold a $430 million bulk package, and Flagstar Bank FSB, Troy, Mich., and Ohio Savings of Cleveland have been selling servicing rights in the secondary market as well.

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