Countrywide Securities Settles With Massachusetts on Sub-Prime Securitization Claims – NMP Skip to main content

Countrywide Securities Settles With Massachusetts on Sub-Prime Securitization Claims

NationalMortgageProfessional.com
Jan 03, 2014

As a result of an investigation by the office of Massachusetts Attorney General Martha Coakley, the state's pension fund will receive $11.3 million as part of a settlement with Countrywide Securities Corporation (CSC). This case is part of the AG’s industrywide review of residential mortgage securitization practices in Massachusetts. AG Coakley’s settlement with CSC includes a total payment of $17.3 million, including the $11.3 million to compensate government investors with the Pension Reserves Investment Management Board (PRIM), as well an additional $6 million paid to the Commonwealth. “We are pleased to return these critical public funds to the state pension system,” AG Coakley said. “It is important to hold Wall Street accountable for its role in the sub-prime lending crisis. Our office will continue its leading role in this area as we work to help homeowners and others harmed by investment banks.” In addition to the payment provided to PRIM, the state pension fund can expect to receive another $7 million by early 2014 as a result of the AG’s recent settlement with JPMorgan announced last month. AG Coakley’s office was the first in the nation to investigate and hold Wall Street securitization firms accountable for their role in the sub-prime mortgage crisis. These investigations have resulted in six settlements to date with total payments of more than $300 million. The initiative began with a $60 million recovery against Goldman Sachs relating to its securitization of “doomed to fail” Massachusetts sub-prime loans. This announcement is the most recent development in this on-going investigation into the role of Wall Street investment banks in funding, purchasing and securitizing unfair residential mortgage loans. It follows the resolution of similar matters that include consumer relief directed to homeowners, money used to compensate investors, and payments to the Commonwealth: ►May 2009: Goldman Sachs paid $60 million ►June 2010: Morgan Stanley paid $102 million ►November 2011: Royal Bank of Scotland paid $52 million ►September 2013: Barclays Bank PLC paid $36 million. ►November 2013: JPMorgan paid $34 million
Published
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