New Mexico recoups $24 million in mortgage-crisis settlement
SANTA FE, N.M. (AP) — New Mexico’s public pension and investment funds will receive $24 million from several major financial institutions to resolve a lawsuit over mortgage-backed securities and the financial crisis more than a decade ago, state prosecutors said.
New Mexico Attorney General Hector Balderas on Monday announced the settlement with seven financial institutions, including Barclays Capital, Goldman Sachs and Merrill Lynch.
The settlement resolves allegations of inadequate disclosures about mortgage-backed securities that were purchased by the state pension and investment funds. Claims were dismissed with no admission of liability.
The payout goes toward state investment accounts and public pension funds overseen by the Public Employees Retirement Association and Education Retirement Board.
The entire settlement is for $32.5 million. Outside plaintiffs who first brought the lawsuit on behalf of New Mexico taxpayers will receive 25% of the settlement, or just over $8 million, under provisions of the state Fraud Against Taxpayers Act.
The New Mexico Public Employees Retirement Association alone lost more than $4 billion in assets in the Great Recession, which was touched off in late 2007 by losses on subprime mortgages that battered the U.S. housing market.
Jerri Mares, a spokeswoman for the attorney general’s office, said the state is at the tail end of litigation regarding the mortgage crisis.
The agency continues to provide advocacy services to mortgage consumers, including informal dispute services.