Goldman Sachs, which is not in the business of making home loans, is seeking to meet its obligation to provide $1.8 billion in consumer relief by buying up tens<br />of thousands of distressed mortgages at discounted prices from Fannie Mae, the government-sponsored mortgage firm, and then hiring outside firms to rework them.<br />Bloomberg News reported in January that one firm that Deutsche Bank could lend money to in order to meet its consumer<br />relief obligation would be Lone Star, which operates its own mortgage servicing firm, Caliber Home Loans.<br />But Deutsche Bank negotiated another path to meeting its consumer relief obligation: In some instances, the bank can get credit for lending money to other firms — even hedge funds and private equity firms —<br />that already are in the business of buying soured mortgages with an eye toward revamping them.<br />How ‘Consumer Relief’ After Mortgage Crisis Can Enrich Big Banks -<br />By MATTHEW GOLDSTEINMARCH 17, 2017<br />In every multibillion dollar settlement with a big bank<br />that peddled faulty mortgage securities, a major provision has been a requirement that the bank provide “consumer relief.”<br />In the case of JPMorgan Chase, for instance, the nation’s largest bank satisfied its requirement to provide $4 billion in consumer relief in September by modifying<br />and restructuring mortgages for about 169,000 borrowers — many of them the bank’s own customers.<br />One criticism of consumer relief settlements — especially those involving Goldman and Deutsche Bank<br />that effectively empower them to buy mortgages or provide loans to other firms — is that they come with a profit incentive.
