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Goldman Sachs reaches $100 million in consumer relief in $5 billion settlement

Still a long way to go to reach consumer relief requirement of $1.8 billion

Goldman Sachs is progressing in the consumer relief obligations that are part of the $5 billion settlement reached in April over toxic mortgage bonds, the settlement’s monitor said in a new report.

The report, published Wednesday by Eric Green, who serves as independent monitor of the settlement, showed that Goldman Sachs passed the $100 million mark in the consumer relief portion of its settlement with the Department of Justice; the New York and Illinois Attorneys General; the National Credit Union Administrationacting as conservator for several failed credit unions; and the Federal Home Loan Banks of Chicago and Seattle.

In addition to the $2.385 billion civil monetary penalty to the federal government, and the $875 million in cash payments to resolve claims by other federal entities and state claims, Goldman Sachs is also required to provide $1.8 billion in consumer relief.

According to the terms of the settlement, the consumer relief can come in the form of loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country, as well as financing for affordable rental and for-sale housing throughout the country.

And according to Green’s latest report, Goldman Sachs has now provided $111,579,337 in consumer relief in various forms.

Green’s report shows that Goldman Sachs earned credit for $107,924,047 in consumer relief through the forgiveness of unsecured debt and other debt, more junior than second liens, in connection with 4,988 loans.

The total principal forgiveness on those loans was $240,252,022, with average principal forgiveness of $48,166 per loan, Green’s office said.

According to Green’s report, those loans were located in 34 states and the District of Columbia, with more than 16% of the associated credit in Illinois and New York and 56% in Hardest Hit Areas, which are census tracts identified by the Department of Housing and Urban Development as those with large concentrations of distressed properties and foreclosure activities.

Per the settlement terms, some kinds of consumer relief earn less credit than the actual dollar amount of loan forgiveness, while other kinds of relief earn more.

Additionally, Green’s report also showed that Goldman Sachs also forgave the balances due on 132 second-lien mortgages, for total principal forgiveness of $7,758,855, and an average forgiveness of $58,779 per loan.

The total credit claimed and conditionally approved for those loan modifications was $3.66 million Green’s office said.

Green’s report showed the extinguished second-lien loans were located in four states, with approximately 55% located in Illinois and New York. Green’s office also noted that 56% of the credit is for forgiveness of loans located in Hardest Hit Areas.

All total, adding in the “test sample” of 100 loan modifications considered in the Green’s initial report, Goldman Sachs has received conditional approval for $113,698,926 worth of credit, Green’s office said.

Green noted that Goldman Sachs is “off to a good start.”

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