Goldman has decided that the unit does not fit into its business model of providing investment banking and trading services to corporations and investors, The Financial Times reported without naming its sources.
"The theory was that Litton would be a good way to get closer to the origination and packaging of mortgages into securities," said Richard Bove, an analyst with Rochdale ¬Securities.
Goldman has spoken to at least one potential buyer, but the talks broke down. No sale is imminent.
Litton is one of several large mortgage servicers that temporarily suspended foreclosures in October while it examined its foreclosure procedures.
State and federal authorities are investigating foreclosure procedures amid accusations that servicers used flawed paperwork to seize homes.