NY gets $670M from mortgage settlement
By: Joseph Spector, Albany Bureay Chief
ALBANY – A $5 billion settlement Monday by the Justice Department with Goldman Sachs over the mortgage crisis in 2008 includes $670 million for New York.
Attorney General Eric Schneiderman said the piece for New York includes $480 million for consumer relief and $190 million in cash.
The agreement, he said, requires Goldman Sachs to provide “significant community-level relief to New Yorkers” that includes an expansion of the state’s Mortgage Assistance Program, which lets distressed homeowners restructure their debt.
Schneiderman, who co-chairs the national working group that investigated the mortgage crisis, said New York has received $5.33 billion in cash and consumer relief from the ongoing settlements.
“Since 2012, my number one priority has been getting New Yorkers the resources they need to rebuild,” Schneiderman said in a statement. “These dollars will immediately go to work funding proven programs and services to help New Yorkers keep their homes and rebuild their communities.”
The deal resolves state and federal probes into the sale of risky mortgages before the housing bubble and subsequent economic meltdown.
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.
“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” Acting Associate Attorney General Stuart Delery said in a statement.