Goldman Sachs Will Pay $5B Over Sketchy Mortgages

Time to pay the piper for the crash
By Newser Editors and Wire Services
Posted Apr 11, 2016 10:39 AM CDT
Goldman Sachs Will Pay $5B Over Sketchy Mortgages
In this 2014 file photo, Lloyd Blankfein, CEO of Goldman Sachs, speaks in a panel discussion at the Clinton Global Initiative in New York.   (AP Photo/Mark Lennihan)

The Justice Department announced a $5 billion settlement with Goldman Sachs over the sale of mortgage-backed securities leading up to the 2008 financial crisis, reports the AP. The deal announced Monday resolves state and federal probes into the sale of shoddy mortgages before the housing bubble and economic meltdown; Reuters notes that the settlement covers the company's activities between 2007 and 2009. It requires the bank to pay a $2.4 billion civil penalty and an additional $1.8 billion in relief to underwater homeowners and distressed borrowers, along with $875 million in other claims.

The agreement is the latest multi-billion-dollar civil settlement reached with a major bank. Other banks that settled in the last two years include Bank of America, Citigroup, and JPMorgan Chase & Co. Goldman had previously disclosed the settlement in January, but federal officials laid out additional allegations in a statement of facts. (More Goldman Sachs stories.)

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