Barclays pays out over Massachusetts subprime mortgages

Pile Of Coins

Another payout.

Barclays agreed on Monday to pay $36.1m to settle charges by Massachusetts that it hurt homeowners there by packaging subprime mortgages that the borrowers could not afford, and which violated state law, into securities.

Reuters reports that the bank is the fourth big bank to settle probes by Massachusetts into securitization practices, according to state Attorney General Martha Coakley, who announced the settlement.

Earlier settlements included $60m by Goldman Sachs in May 2009, $102m by Morgan Stanley in June 2010 and $52m by Royal Bank of Scotland in November 2011, Coakley said.

The securitization of home loans that quickly soured amid the U.S. housing downturn was a factor that contributed to the 2008 global financial crisis. While much of the subsequent regulatory scrutiny has occurred at the national level, many U.S. states have pursued their own probes as well.

Massachusetts said that from late 2005 through 2007, Barclays financed and packaged adjustable-rate mortgages made by subprime lenders such as Fremont, New Century, Option One and WMC Mortgage that were 'presumptively unfair' under state law.

To access the complete Reuters article hit the link below

Barclays to pay $36.1m in Massachusetts subprime settlement 

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