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Goldman Sachs to pay $5.1 billion mortgage settlement

Staff writer |
Goldman Sachs Group has reached a nearly $5.1 billion tentative settlement of a federal and state investigation of its handling of mortgage-backed securities before the national financial crisis.

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Goldman Sachs will pay a $2.4 billion civil monetary penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief - including mortgage principal forgiveness for underwater homeowners and distressed borrowers, forecloseure prevention, support for debt restructuring and other programs.

The company said the settlement would reduce the bank's fourth-quarter 2015 earnings, scheduled to be announced Wednesday, by approximately $1.5 billion on an after-tax basis.

"We are please to have reached an agreement in principle to resolve these matters," Goldman chairman and CEO Lloyed Blankfein said in a statement announcing the deal.

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