"State gets subprime loan cuts for 700; Reaches $60m accord with Wall Street giant; Bank played big role in packaging of debt" by Jenifer B. McKim, Globe Staff | May 12, 2009
In the first settlement of its kind in the country, Massachusetts Attorney General Martha Coakley has reached a $60 million agreement with a Wall Street investment bank that helped facilitate the frenzy of subprime lending that saddled so many homeowners with mortgages they could not afford to pay.
Wall Street giant Goldman Sachs Group agreed to reduce the size of subprime loans for some 700 Massachusetts homeowners by up to 35 percent, Coakley said yesterday. The investment bank played a key role in perpetuating sales of subprime mortgages by packaging the loans into securities that were sold to investors, with the proceeds used to fund new rounds of mortgages....
Goldman Sachs ended up owning the loans from the pools of securities it had created....
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