The Federal Reserve has ordered Goldman Sachs to conduct an internal investigation into their shady mortgage practices. CNN Money explains:
The action orders Goldman to hire an independent consultant to investigate foreclosure proceedings by Litton Loan Servicing between 2009 and 2010. The review is to address "a pattern of misconduct and negligence relating to deficient practices," the Fed said. The goal, said the Fed, is to compensate homeowners who were wrongfully foreclosed upon or who faced some other impropriety.
The order comes as part of a deal that Goldman made with the Fed and New York banking regulators to sell off Litton Loan Servicing, their mortgage unit. In addition to conducting the internal review, "Goldman agreed to forgive 25 percent of principal balances for struggling homeowners who are 60 days past due on mortgage payments, at a cost of $53 million," reports Reuters. "It will also compensate some home loan borrowers for wrongful foreclosures, at an indeterminate cost."
New York Financial Services Superintendent is careful to point out that the internal investigation "does not preclude any future investigations of past practices or release any future claims or actions whatsoever." In other words, Lloyd should probably hold onto that defense lawyer he recently hired.
This article is from the archive of our partner The Wire.