Goldman Sachs reached a $60 million settlement Monday to end an investigation by the Massachusetts attorney general’s office into whether the firm helped promote subprime lending practices, according to The New York Times. Attorney General Martha Coakley is conducting a continuing investigation into other investment banks that facilitated loans that resulted in widespread foreclosures.
Most of the money from the Goldman settlement will be used to establish a loan modification program for Massachusetts homeowners who have mortgages from Goldman entities, which would allow them to write down their principal balances by as much as 50 percent.
During a news conference Monday, Coakley emphasized that the Massachusetts Office of the Attorney General will continue to pursue “the deceptive marketing of unfair loans and the companies that facilitated the sale of those loans to consumers in the Commonwealth.”
A Goldman spokesperson, Michael DuVally, said the company was “pleased to have resolved this matter,” and declined to comment further.
In Massachusetts, 714 residents hold mortgages directly with Goldman, while thousands of others have loans serviced by Goldman’s affiliated mortgage servicing company, Litton Loan Servicing.