Goldman Sachs, Mass. AG Settle Over Subprime Loans

t of its settlement with the office of Massachusetts Attorney General Martha Coakley, Goldman Sachs & Co. has agreed to provide loan restructuring valued at approximately $50 million to Massachusetts subprime borrowers. The settlement agreement stems from Coakley's investigation into the role of investment banks in the origination and securitization of subprime loans in Massachusetts. The loan restructuring program is designed to enable borrowers to replace problem loans with new, more affordable loans that take into account the current value of their properties. Goldman has also agreed to make a $10 million payment to the commonwealth. "We are pleased that Goldman cooperated during this investigation and that it has committed to working with our office to help Massachusetts borrowers who are struggling with unsustainable subprime loans," says Coakley. "We will continue to investigate the deceptive marketing of unfair loans and the companies that facilitated the sale of those loans to consumers in the commonwealth." Under the settlement, Goldman has agreed to significant principal write-downs to allow Massachusetts homeowners to refinance or sell their homes. For homeowners with loans held by Goldman entities, Goldman has agreed to reduce the principal of first mortgages by up to 25%-35% and the principal of second mortgages by 50% or more. Borrowers whose first mortgage is significantly delinquent will be required to make a reasonable monthly loan payment while seeking refinancing or until they sell their home, Coakley's office says. If after six months, a borrower is still unable to find financing or sell his or her home, Goldman will reduce the principal owed on the existing loan to assist the borrower. Additionally, for loans not currently held by Goldman, but which are serviced by Goldman's affiliated servicing company, Litton Loan Servicing LP, Goldman has agreed to assist qualified borrowers with finding refinancing options and other alternatives to foreclosure. SOURCE: Office of Attorney General Martha

LEAVE A REPLY

Please enter your comment!
Please enter your name here