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Joel Sucher Headshot

Is Newt almost right about Romney, Goldman and Florida Foreclosures?

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In a desperate attempt to claw up his poll numbers, Newt Gingrich has lobbed a bunch of accusatory mortar shells into Mitt's campaign for Sunshine State supremacy. Probably the shell that's created the most pushback is the one with Goldman Sachs painted on its side. It seems that the Massachusetts millionaire, according to his tax returns, had profited from investments, in particular a Goldman fund that was chock full of mortgage backed securities. By extension, Gingrich claimed, Florida homeowners whose defaulted mortgages were part of that Goldman fund had been had been victims of foreclosure. Mitt, according to Newt, seemed to be living up to his legacy as one helluva "vulture capitalist."

The New York Times jumped into the fray, throwing in its two cents to correct what they felt was a besmirchment of the already tarnished reputation of Wall Street's vampire squid.

No, The New York Times reported in a January 27 article, Goldie had already dumped its mortgage servicer, Litton Loan, back in late August, so it couldn't be accused of foreclosing on anyone, at least not now, and certainly not on anyone's Florida home. Servicers, as part of their business model, routinely collect payments from homeowners on behalf of investment trusts, which actually own the loans, and, per pooling and servicing agreements, routinely call the shots when it comes to foreclosures. So, in that realm anyway, Goldman had clean hands.

However, that same day, Business Insider, in a piece titled "Newt's False and Pandering Attack on Goldman Sachs," did fill in some gaps notably missing in the Times piece. Blankfein and Company, according to the article, did hold "a very small number of whole loans in its Goldman Sachs Bank USA division," and added that "it's not out foreclosing on homes up and down Florida."

OK, at least they seemed to be doing a bit more in the way of homework. But it still begs the question: If Goldman itself is still holding these so-called "whole loans" in a mortgage portfolio, why is it inconceivable that they're not "foreclosing on homes up and down Florida?"

At the risk of being accused of defending Newt Gingrich as he tries to beat his way out of the Florida quicksand, let me suggest that there's more here than meets the editor's eyes at either The New York Times or Business Insider. In fact, there's evidence that Goldman is not only holding on to these mortgages, they still have the ability to foreclose on homeowners, even those in the Sunshine State.

In a November, 2, 2009 article for the McClatchy News Syndicate, ("Goldman takes on a new role: taking people's homes"), correspondent Greg Gordon first revealed the existence of a little known Goldman affiliate known cryptically as MTGLQ. As a wholly owned subsidiary of Goldman, MTGLQ was never listed as the "owner" of any loan, but simply functioned as the heavy who came after defaulting homeowners who hadn't paid their mortgage vig (monthly payment). In his research, Greg Gordon found a bunch of interesting cases around the country involving MTGLQ's foreclosure efforts, including one in Florida, where the company targeted Orland homeowner, Adela Mendez. Mendez sought refuge in bankruptcy court (filing bankruptcy stays the foreclosure process).

Like its owner, MTGLQ doesn't particularly covet publicity. It thrived in the shadowy world of sub-prime investing; working to squeeze out any remaining revenue from defaulted mortgages with clearly no profit potential.

So what's the status of MTGLQ? According to ex-Litton Loan executive, Chris Wyatt, he remembers MTGLQ well. As head of the executive resolution team at Litton Loan Servicing, he was in constant contact with the powers that be at Goldman (Litton had been purchased by Goldman in December, 2007).

According to Wyatt (who's currently working with Pacific Street Films on the documentary, "Foreclosure Diaries"), MTGLQ is an acronym for "mortgage liquidation": a fitting moniker for what they did on behalf of their boss.

When Goldman dumped Litton Loan last August, according to Wyatt, it still retained a portfolio of mortgage loans: so called "whole loans" which it continues to service. However, according to Wyatt, at the time of his exiting Litton in April 2010, MTGLQ was in the process of morphing its name into something less Darth Vaderish: Goldman Sachs Mortgage Company. Why? Clearly, publicity averse Goldman wanted to avoid any association with something as negative as "liquidation," which a probing media would quickly determine was "foreclosure" by any other name.

Gordon, in his article, also documents Goldman's reticence to admit to anyone that it owned the company. In a 2007 he highlights -- that of California homeowner, Tony Becker, forced into bankruptcy to protect his home -- it took US District Court Judge William Alsup to drag that bit of information out of a reticent attorney for MTGLQ. Eventually, MTGLQ gave up trying to seize Becker's house.

What Wyatt uncovered, first hand, about Goldman's foreclosure practices shocked him; so much so that he resigned from the company and soon wound up in the center of a kerfuffle of sorts after appearing as a "whistleblower" on MSNBC's Dylan Ratigan show in May 2011. Even though he never mentioned either Litton or Goldman (he simply kept the discussion to the foreclosure crisis) in an interview with Lisa Meyers, Goldman lawyers peppered Wyatt with "threats" regarding any possible future revelations.

So in a strange irony of fate; Newt's pot shots at Mitt may have inadvertently shed light on another one of Goldman's little foreclosure "secrets."

Joel Sucher, a New York film maker, is working on "Foreclosure Diaries," a documentary about the financial crisis. This is his first contribution to Off the Bus. If you would like to contribute as a citizen journalist to The Huffington Post's coverage of American political life, please contact us at