Kramer Kaslow: The Financial Times Reports that NY Fed is Investigating Goldman Unit

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Philip Kramer, lead attorney for the Law Offices of Kramer and Kaslow, weighs in on the latest foreclosure investigation of Goldman unit

Kramer & Kaslow

The Law Offices of Kramer and Kaslow recently released comments from their lead attorney, Philip Kramer, regarding the latest report from The Financial Times. According to the British newspaper The Financial Times, “The Federal Reserve Bank of New York is investigating allegations that the mortgage servicing arm of Goldman Sachs failed to conduct appropriate reviews before denying borrowers a chance to lower their payments through a government loan modification programme.”

When asked for a comment, the article says that the Fed confirmed that it was “conducting an inquiry”. The Financial Times also reports, “a person familiar with the Goldman unit concerned, Litton Loan of Houston, Texas, said loans were denied without the proper review under a “denial sweep” strategy devised to clear a backlog of applications.”

According to the article, the allegations were brought to the Fed’s attention by the Financial Times, which obtained a letter written by an anonymous Litton employee.

Consolidated plaintiff litigation attorney Philip A Kramer who represents hundreds of clients suing six of the nation’s largest banks, is familiar with Litton and feels that its practices mirror what he has seen at many other financial institutions as well.

“You have a couple of things going on here,” says Kramer. “One, you can never underestimate incompetence. Undertrained, overworked employees deliberately lose paperwork so that they can claim they have met their quotas, when the problem really lies with incomplete files. That happens, but there are more pernicious goings on as well. The banks are supposed to favor the government HAMP program, but in truth, if they are going to make a loan modification accommodation, they would rather use one of their own in-house programs which are typically less generous to a homeowner.”

According to The Financial Times article, HAMP modifications are supposed to take priority over non-governmental loan modification programs. However, the regulations establishing HAMP rules provide no penalties. The article goes on the report that the letter received by the Fed from the person familiar with Litton said that at the same time that the modifications under Hamp were being denied, Goldman was increasing non-government modifications for loans it retained on its books.

“And that,” Philip Kramer observes, “is the heart of the problem. Bank greed is pitted against the needs of desperate homeowners. ‘The quality of mercy is not strained.’ Well, I’m guessing that bank executives don’t exactly take that to heart. When a bank is involved, I suspect greed is going to win out every time. At the expense of the homeowner, I’m afraid.”

More of Philip Kramer’s observations can be found at the Kramer Kaslow blog.

PHILIP A. KRAMER is the senior partner of the Law Office of Kramer & Kaslow, in Calabasas, California. Kramer & Kaslow is Martindale Hubbell “AV” rated. Mr. Kramer is a perennial recipient of the prestigious “Southern California Super Lawyer” award.

Mr. Kramer received his undergraduate degree from Ohio State University and his Juris Doctorate from the Catholic University of America, in Washington, DC. His practice emphasizes commercial litigation and trial advocacy, with a concentration on business litigation, and real property matters. He has prosecuted and defended cases for over twenty five years.

Mr. Kramer is a licensed real estate broker and has spent considerable time providing legal services in connection with real estate issues relating to loan modification and loss mitigation, land use and zoning, environmental issues, easements, construction and development, finance, and landlord tenant matters.

Mr. Kramer is admitted to practice before all courts in the State of California, the United States Supreme Court and the United States Court of Military Appeals. Mr. Kramer has tried in excess of 200 cases. He has appeared on nationally televised programs regarding pre-trial procedure and trial strategy and has appeared as a guest lecturer on topics ranging from constitutional law to trial practice, and Mr. Kramer frequently lectures on a broad spectrum of various legal and business issues.

Mr. Kramer also serves as a Judge Pro Tem for the Los Angeles Superior Court and as a Mediator.

Mr. Kramer is also a past president of the Los Angeles West Inns of Court, a national organization dedicated to bringing professionalism and civility back into the legal profession. He also serves on numerous Boards of Directors and serves as an officer in many companies. For more information call (818) 224-3900 or visit


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Stuart R. Simone, Esquire
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