Massachusetts Attorney General Martha Coakley has reached a settlement with Barclays Bank, which has agreed to pay more than $36 million to resolve claims that it pooled and sold unsustainable subprime mortgages.
About $25 million of that amount will be earmarked for reducing the loan principal for about 450 subprime borrowers in the state. Part of the settlement also will go to cities and towns where these loans were made as well as to nonprofit organizations that work on foreclosure relief.
According to Coakley’s office, Barclays securitized risky home loans that carried low “teaser” introductory interest rates and were written to borrowers whose payments were more than half of their income and whose homes were worth less than the mortgages. Those eligible for relief from the settlement include borrowers whose loans were securitized by Barclays in 2006 and 2007.