Mass AG Squeezes $60M Settlement From Goldman Sachs In Connection With Subprime Mortgage Probe

In Boston, Massachusetts, The Boston Globe reports:

• More than 700 Massachusetts homeowners struggling with subprime mortgages will have their monthly payments reduced - some by as much as 35 percent - as part of a $60 million settlement Attorney General Martha Coakley reached with Goldman Sachs Group Inc.

• Goldman Sachs owns those homeowners' mortgages through subsidiaries and has agreed to rewrite the terms of their loans in order to stave off legal action by Coakley. The attorney general has been investigating the role investment banks played in promoting subprime mortgages that borrowers ultimately couldn't afford.

***

• As part of the settlement, Goldman Sachs will reduce the outstanding balances of subprime mortgages for those 714 homeowners, most of whom live in Boston, Brockton, Lawrence, Springfield, and Worcester. Homeowners seeking to refinance or sell their properties could see a reduction in their first mortgages of up to 35 percent as well as much as a 100 percent cut in second mortgages.

• Reducing those loan amounts will cost Goldman Sachs $50 million. It has also agreed to have its subsidiary, Litton Loan Servicing LP, help qualified borrowers who are in trouble on their loans to avoid foreclosure. Goldman will also pay the state $10 million.

For more, see State reaches $60m subprime deal with Goldman Sachs.

For the Massachusetts Attorney general press release, see AG Coakley and Goldman Sachs Reach Settlement Regarding Subprime Lending Issues.

Go here for:

• Settlement Agreement between AG & Goldman Sachs,
• Goldman Sachs Remedy Chart. UndoMortgageLoans TILAdelta