Under threat of "significant court sanctions" and a probable flood of similar litigation, Goldman Sachs was forced to admit they have major exposure to subprime loans. Many will recall Lloyd Blankfien's public statement, as BSC and LEH collapsed (as I forecast, less than a year prior) that Goldman has no exposure to subprime, despite their own filings identifying some $53B in "non"-prime mortgages.
Ref:
Goldman Sachs mortgage sent couple into bankruptcy
SUCCESS: Company finally forced to reveal it actually held the paper.
According to the Anchorage Daily News, Goldman Sachs secretly tried to charge an Alaska couple $626,000 of sexed up charges on a 356,000 subprime mortgage. Judge Roger Efremsky crushed Goldman after finding out they were lying about not holding the subprime loan. Caught with their hand in the cookie jar, Goldman immediately lowered their subprime loan's interest rate to 5%, reducing the couple's monthly mortgage payments circuitously reaching Goldman Sachs, by 53%.
If your Goldman Sach's subprime loan is higher 5%, you should call them to see if they will honor the 5% precedent this case establishes.
Thursday, December 3, 2009
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I would not agree that the judge crushed Goldman. It sounds like they did not pay a fine or anything. That is not even a slap on the wrist
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Yeah, that's true, but they did lose about $1.2M bucks in predatory subprime interest.
ReplyDelete$1.2 million?
ReplyDeleteThat's probably just barely enough money for GS to notice it.
Pocket change, in other words...