Goldman to pay $ 5 billion in mortgage settlement

Goldman Sachs said Thursday it will pay roughly $ 5 billion to settle federal and state probes of its role in the sale of shoddy mortgages in the years leading to the housing bubble and subsequent financial crisis.

Coming nearly eight years after the crisis, the settlement is by far the largest the investment bank has reached related to its role in the meltdown. But the payment is dwarfed by those made by some of its Wall Street counterparts.

Goldman will pay $ 2.39 billion in civil monetary penalties, $ 875 million in cash payments and provide $ 1.8 billion in consumer relief in the form of mortgage forgiveness and refinancing.

The U. S. Department of Justice, the attorneys general of Illinois and New York, and other regulators who are part of the settlement have not officially signed off on the deal, which could take some time.

The government agencies are part of a joint state- federal task force created by President Barack Obama after the 2008 financial crisis that has extracted some of the largest settlements out ofWall Street.

Goldman has been one of the last banks to settle with regulators for its role in the financial crisis.

Bank of America individually has paid out tens of billions of dollars in fines as a result of its role in the housing crisis. When JPMorgan reached a similar settlement with the same task force, it paid out $ 13 billion.