May 15, 2009 - 6:58am
The Goldman Sachs Group, Inc., a bank holding company that engages in investment banking, securities services and investment management, is agreed to pay US$60-million to settle a Massachusetts investigation into the mortgage securities packaging.
As Mass. Attorney General Martha Coakley said at a news conference the bank should pay US$50-million as compensation to homeowners and the rest to the state. Some loan principal reductions are also will be allowed according to the agreement. Also she noted that the number of mortgages under Goldman Sachs’s holding is equal to 714.
The bundling of the riskiest type of mortgages into securities had as a consequence US housing collapse turned to recession on a global scale. Foreclosures led to decrease in bond values and bankruptcy of some Wall Street firms. The Massachusetts attorney general investigated some firms in order to make the types ? mortgages that Goldman securitized.
According to Ms. Coakley words, the investigation is in process and Goldman Sachs wasn't asked to admit wrongdoing. Also she added that for homeowners-client of Goldman Sachs's Litton Loan Servicing LP division in Massachusetts the terms of qualified loans will be refinanced or modified. For the clients of Goldman entities the principal of first mortgages will be reduced by up to 25 to 30% and second mortgages by 50% of more.
As Mass. Attorney General Martha Coakley said at a news conference the bank should pay US$50-million as compensation to homeowners and the rest to the state. Some loan principal reductions are also will be allowed according to the agreement. Also she noted that the number of mortgages under Goldman Sachs’s holding is equal to 714.
The bundling of the riskiest type of mortgages into securities had as a consequence US housing collapse turned to recession on a global scale. Foreclosures led to decrease in bond values and bankruptcy of some Wall Street firms. The Massachusetts attorney general investigated some firms in order to make the types ? mortgages that Goldman securitized.
According to Ms. Coakley words, the investigation is in process and Goldman Sachs wasn't asked to admit wrongdoing. Also she added that for homeowners-client of Goldman Sachs's Litton Loan Servicing LP division in Massachusetts the terms of qualified loans will be refinanced or modified. For the clients of Goldman entities the principal of first mortgages will be reduced by up to 25 to 30% and second mortgages by 50% of more.