Workers United Calls on Attorneys General to Take Action against Goldman Sachs' Sub-prime Lending Activities

For Immediate Release

Contacts:

Eric Sharfstein, 917-208-6980, eric.sharfstein@workers-united.org

Brian Morse, 917-209-1957, brian.morse@workers-united.org

New York -Earlier today, the labor union Workers United delivered, to Attorneys General in ten states among the most impacted by the foreclosure crisis, research and analysis that points to ways to alleviate some of the pain of the foreclosure and financial crisis at one of its key sources: Goldman Sachs.

The ten states that were the subject of the analysis are Arizona, California, Florida, Georgia, Illinois, Maryland, New Jersey, New York, Texas and Virginia.

Goldman Sachs was one of the companies most responsible for creating the financial crisis and one of its greatest beneficiaries. Goldman participated in many aspects of the subprime loan industry from repackaging and selling toxic assets to participating in the loan servicing industry that continues to throw borrowers out of their homes today.

In May, Massachusetts District Attorney Martha Coakely announced a groundbreaking settlement with Goldman Sachs after her investigation suggested that Goldman had "played a role" in predatory lending in the state.  Goldman paid $10 million to the state and agreed to an estimated $50 million in direct relief for those homeowners whose loans were held by the firm.

"It's just plain wrong that Goldman Sachs would participate in predatory lending that puts Americans at risk of losing their homes and then pocket billions in profits and bonuses," said Bruce Raynor, President of Workers United. "It's heartening to see the tough stance that Massachusetts has taken. I hope many other states will follow its lead."

Workers' United has analyzed $23.2 billion worth of Goldman Sachs' mortgage pass-through certificates offered from August, 2005 to February, 2007 and found that ten states had 102,524 mortgages, 61% of the national total, included in Goldman's securities, cumulatively almost 50 times the number in Massachusetts. Meanwhile, foreclosures continued to be a huge problem with almost 1.5 million so far this year in these tens states alone.

The Massachusetts settlement also required that Litton Loans, a loan servicing company owned by Goldman Sachs, reach out to its customers and extend refinancing options.  Litton settled a class action lawsuit earlier this year after numerous allegations from customers that it failed to credit loan payments properly, causing homeowners who were making timely payments to still face foreclosure.  So far this year, there have been at least 2,487 residential real estate transactions involving Litton Loans as the buyer, seller or servicer in the ten states analyzed.

"Working families everywhere have been victimized by the financial crisis, while Goldman gets government bailouts and distributes billions in bonuses. Its time Goldman return a portion of this money to homeowners harmed by its actions," Raynor said. "While the federal government has only assisted 10,000 home owners with renegotiation since last fall, states have the opportunity to seek relief for thousands of homeowners and state budgets in one fell swoop by following the Massachusetts model."

To read one of the letters, sent to New York Attorney General Andrew Cuomo, go to: http://www.workers-united.org/sites/workers-united.org/files/NewYorkLetter.pdf

Workers United, SEIU was formed in March 2009. Workers United members work in the laundry, food service, hospitality, gaming, apparel, textile, manufacturing and distribution industries.

Edited 8/3/10

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