Sharp Credit – Credit News – Credit Information
Goldman Sachs is getting closer to hitting its $1.8 billion consumer relief obligation.
The bank, working to fulfill mortgage settlement agreements between the U.S. Department of Justice and three states, forgave a total of $78.7 million in principal on 746 first-lien mortgages since its last update on Aug. 1, for average principal forgiveness of $105,467 per loan and total reportable credit of $79.3 million after appropriate crediting calculations and multipliers were applied.
This brings the total credit claimed since Goldman resolved allegations related to marketing, structuring, arrangement, underwriting, issuance and sale of residential mortgage-backed securities to $1.2 billion, or 67% of its target. The bank has now modified 10,671 mortgages in the two and a half years since the settlement was reached.
“I am pleased to be able to confirm that Goldman Sachs continues to make steady progress toward meeting its obligation to provide consumer relief valued at $1.8 billion,” wrote Eric Green, a professional mediator and retired Boston University law professor, who has overseen other large bank settlements like that of Morgan Stanley, in a report.
The modified mortgages span 42 states and the District of Columbia, with 32% of the credit located in the settling states — New York, Illinois and California — and 47% located in areas defined by the U.S. Department of Housing and Urban Development as being “hardest hit,” referring to regions with large concentrations of distressed homes and foreclosure activities, according to the report.
Goldman’s consumer relief obligation is only a piece of the more than $5 billion settlement the bank agreed to in April 2016, which includes a large civil money penalty.
The bank also agreed to a “statement of facts,” which involves acknowledgements that it “received information indicating that, for certain loan pools, significant percentages of the loans reviewed specifically did not conform to the representations made to investors about the pools of loans to be securitized.”
Like Goldman Sachs, Morgan Stanley is also working to fulfill a consumer relief obligation, which it agreed to in order to settle a residential mortgage-backed-securities-related complaint with New York State. It fulfilled 93% of its $400 million requirement as of Aug. 1.