For Immediate Release - December 30, 2013

AG Coakley Announces $11 Million Payment to State Pension Fund From Settlement with Countrywide Securities Corporation

BOSTON – As a result of an investigation by Attorney General Martha Coakley’s office, the state pension fund will receive $11.3 million this week as part of a settlement with Countrywide Securities Corporation (CSC). This case is part of the AG’s industry-wide 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 subprime 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 subprime 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 subprime loans.

Today’s 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:

AG Coakley’s office has been a national leader in pursuing banks and investment giants for their role in the economic crisis. In addition to recoveries involving the securitization of loans, AG Coakley has also obtained settlements with Countrywide, Fremont Investment and Loan, Option One and others on behalf of Massachusetts homeowners. In 2012, AG Coakley’s office joined a $25 billion nationwide settlement with the five major lenders over unlawful foreclosure practices.

AG Coakley’s first-in-the-nation HomeCorps program, established with funds from the national mortgage settlement, continues to provide assistance to borrowers across the state with dedicated loan modification specialists and through a series of grants.

More information about AG Coakley’s work during the lending crisis can be found here.

The investigation of CSC’s securitization practices was handled by Assistant Attorneys General Aaron Lamb, Peter Leight, and Glenn Kaplan of Attorney General Martha Coakley’s Insurance and Financial Services Division. 

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