Goldman Has Strong Quarter but Takes Hit on Commercial Mortgages

In what was otherwise a good period for the Goldman Sachs Group, commercial mortgages were one of the down items in the firm's second quarter 2009 results. The Fixed Income, Currency and Commodities business, in which the mortgage business reports, had record quarterly net revenues of $6.8 billion. Net revenues in mortgages, Goldman Sachs said, were higher when compared with the second quarter 2008. However, the results in mortgages included a loss of approximately $700 million on commercial mortgages. No details were offered in its SEC filing. One lingering problem on Goldman's balance sheet is its exposure to commercial real estate as the economy remains weak and defaults rise. Goldman owns Litton Loan Servicing, a specialty servicer that specializes in subprime mortgages and 'scratch & dent' loans.