Countrywide Securities Corporation will pay a total of $17.3 million, which also includes $6 million to be paid directly to the state, according to Massachusetts Attorney General Martha Coakley. The remaining $11.3 million will be used to compensate government investors with the state’s Pension Reserves Investment Management Board.
“We are pleased to return these critical public funds to the state pension system,” 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.”
The state pension fund should also receive an additional $7 million early this year as the result of a separate settlement with JPMorgan Chase, according to Coakley.
Massachusetts was the first state to pursue litigation against securitization firms for their roles in the subprime mortgage crisis. So far, investigations by the state attorney general’s office have resulted in six settlements totaling more than $300 million.
A large mortgage firm has agreed to pay $11.3 million into the Massachusetts pension fund as part of a settlement over residential mortgage securitization practices.