Goldman Sachs has successfully completed 71% of the $1.8 billion in consumer-relief it is obligated to provide under its two mortgage-backed-securities settlements with the U.S. Department of Justice and three states, according to the latest report by the Independent Monitor of the settlements, Professor Eric D. Green.
In his tenth report on the Goldman Sachs settlement announced today, Professor Green approved settlement credit for Goldman Sachs’ forgiveness of first-lien principal on 794 loans and extinguishment of another 58 second-lien loans, bringing Goldman Sachs’ cumulative consumer-relief credits under the settlements to a total of more than $1.25 billion.
Since Professor Green’s previous report on November 1, 2018, Goldman Sachs forgave a total of $82,828,355 in principal on 736 first-lien mortgages, for average principal forgiveness of $112,539 per loan and total reportable credit of $84,445,523 after the application of appropriate crediting calculations and multipliers. Goldman Sachs also sought credit for the extinguishment of 58 second lien loans, with $3,734,507 in total principal forgiven for an average principal forgiveness of $64,388 and total reportable credit of $1,826,785 after the application of appropriate crediting calculations and multipliers.
The latest increment brought the total amount of credit claimed and conditionally validated by the Monitor to $1,286,075,590 or 71% of the $1.8-billion target.
“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,” Professor Green said. “Nearly three years after the Settlement Agreements were signed, Goldman Sachs appears to be 71% toward completing its Consumer-Relief obligations.”
The modified first-lien mortgages are spread across 43 states and the District of Columbia, with 36% of the credit located in the settling states of New York, Illinois, and California, and 50% 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 extinguishment of the 58 second lien loans are located in 27 states, with 25% of the associated credit in the three Settling States and 50% in Hardest Hit Areas.
Goldman Sachs’ two settlement agreements, reached on April 11, 2016, resolved potential claims 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, 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.