The Law Office of Rajeh A Saadeh LLC
Serving All Of New Jersey
Powerful Advocacy | Client-Focused Solutions
Call Now

Sophisticated Counsel. Smart Strategies.

Is bank in good faith or just another distressed-mortgage investor?

The mega bank Goldman Sachs buys distressed home loans.

That in itself is hardly noteworthy. What does make the bank’s activity in a so-called “niche market” interesting, though, is what it does thereafter. Developments on that front have become a major news story.

Many readers of our New Jersey real estate and foreclosure blog posts at the Law Office of Rajeh A. Saadeh might know well Goldman Sachs central role in the state’s residential realty market. We referenced the bank’s New Jersey nexus in our June 10 blog post.

An in-depth article on distressed properties and foreclosures notes that Goldman Sachs got into the distressed loan business because it essentially had to. The bank was slapped by federal regulators “for marketing and selling faulty mortgage securities to investors.” As part of a settlement, the bank agreed to buy distressed properties and thereafter help borrowers rework loans and keep their homes.

Has it done that?

Reportedly, yes – but only to a degree.

And that partial performance irks critics, who contend that Goldman Sachs “is getting credit for performing like any other distressed-mortgage investor.”

To wit: It is foreclosing on homes and then reselling them for profit, notwithstanding its pact with the government.

The bank insists that it is outperforming other investors in the same circumstances. It stresses that it is helping more individuals and families save their homes and foreclosing less often than other banks and equity firms.

Still, that does not prominently signal salutary bank behavior. Remarkably, perhaps, Goldman Sachs has pulled the foreclosure trigger on more than 10,000 properties.

 The bank should be doing better, say those who question it. And a higher level of performance begins by materially curbing foreclosure activity.