Industry NewsMortgage

Goldman to restructure subprime loans

$60 million settlement with Massachusetts attorney general

About 700 Massachusetts homeowners will see the principal on their subprime loans slashed and thousands of others will get help refinancing under the terms of settlement between the state attorney general and Goldman Sachs & Co. Massachusetts Attorney General Martha Coakley launched an investigation into the origination and securitization of subprime loans in December 2007. The investigation is aimed at discovering whether companies that bundled mortgages into securities for sale to Wall Street investors failed to determine whether the loans complied with loan originators' stated underwriting guidelines, and whether investors had access to information about allegedly unfair or problem loans. The attorney general's office has also sued Fremont Investment & Loan and Option One alleging unfair, deceptive and predatory lending practices, and obtained preliminary injunctions against those companies. To resolve any potential claims stemming from the attorney general's ...

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