The Federal Reserve Bank of New York received a whistleblower letter from a Litton Loan employee, who claims the mortgage servicer used internal procedures to deny mortgage modifications to distressed homeowners.
"We are in possession of the letter and are conducting an inquiry," a N.Y. Fed spokesman told HousingWire.
The letter was provided to the central bank by the Financial Times.
The London-based international newspaper reports the employee's letter detailed a "denial sweep" strategy to clear the backlog of applications for loan modifications.
Goldman Sachs (GS: 136.19 -0.04%) acquired Litton Loan in 2007. The Houston-based firm services about $46.1 billion worth of U.S. mortgages. In December, Goldman announced plans to sell Litton a few months after discovering "process issues" with Litton's foreclosure procedures.
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