Goldman Sachs Reaches Halfway Mark in Fulfilling Consumer-Relief Obligation under Mortgage Settlements

BOSTON, Feb. 15, 2018 /PRNewswire/ -- Forgiving principal on 806 mortgages in recent months brought Goldman Sachs halfway toward fulfilling its $1.8-billion consumer-relief obligation under its two April 11, 2016, mortgage-related settlement agreements with the U.S. Department of Justice and three states, Eric D. Green announced today in his sixth report as independent Monitor of the consumer-relief portions of the agreements.

Since Professor Green's previous report on November 15, 2017, Goldman Sachs forgave a total of $73,508,818 in principal on those 806 first-lien mortgages, for an average principal forgiveness of $91,202 per borrower.

After applying credit calculations and multipliers specified in the settlement agreements, Goldman Sachs claimed reportable credit of $97,241,433 toward its obligation of $1.8 billion in consumer-relief credit. The Monitor's report contains a detailed explanation of how the credit is calculated. It also describes protocols that Professor Green and his legal and financial advisers developed with Goldman Sachs to help determine when credit is properly approved or denied for loan modifications in which principal forgiveness is earned in stages as the homeowner makes loan payments on time.

The relief in the most recent period was spread across 41 states, the District of Columbia and Puerto Rico, with 35 percent of the credit located in the settling states of New York, Illinois, and California, and 12 percent of the credit located in Hardest Hit Areas, or census tracts identified by the U.S. Department of Housing and Urban Development as containing large concentrations of distressed properties and foreclosure activities.

The total amount of credit claimed and conditionally validated to date under both settlement agreements comes to $918,142,212. "Approximately 22 months after the settlement agreements were signed, Goldman Sachs appears to be a bit more than halfway toward completing its consumer-relief obligations," Professor Green said.

The two agreements settled potential and filed legal claims against Goldman Sachs regarding the marketing, structuring, arrangement, underwriting, issuance and sale of mortgage-based securities. Besides the Department of Justice, California, Illinois and New York, Goldman Sachs reached settlements with the National Credit Union Administration Board and the Federal Home Loan Banks of Chicago and Des Moines. Under the settlements, Goldman Sachs agreed to provide a total of $5.06 billion, including consumer relief valued at $1.8 billion to be distributed by the end of January 2021.

Professor Green, a professional mediator and retired Boston University law professor now a lecturer in law at Harvard University, was named by the settling parties as independent Monitor with responsibility for determining whether Goldman Sachs fulfills its consumer-relief obligations. He has assembled a team of finance, accounting and legal professionals to assist in the task.

The report is available at the Monitor's website at: http://goldmansachs.mortgagesettlementmonitor.com. The website provides further details about the settlement, plus contact information for Goldman Sachs, the Department of Justice, the Attorneys General of California, Illinois and New York, and agencies that provide legal or tax advice to consumers.

The Monitor's mailing address is: Monitor of the Goldman Sachs Mortgage Settlement, P.O. Box 10310, Dublin, OH 43017-5910, and the e-mail address is [email protected].

SOURCE Monitor: Eric D. Green