Goldman Sachs to pay $5B mortgage settlement

NEW YORK

Goldman Sachs agreed to a $5 billion settlement for its mortgage practices leading up to the 2008 financial crisis, New York state authorities said Monday.

The settlement includes $2.3 billion in civil penalties and $1.8 billion for individuals who were negatively affected during the housing bubble.

"This settlement, like those before it, ensures that these critical programs -- such as mortgage assistance, principal forgiveness, and code enforcement -- will continue to get funded well into the future, and will be paid for by the institutions responsible for the financial crisis," state Attorney General Eric T. Schneiderman said in a statement.

The government has reached a number of settlements with major financial institutions since 2012 but not a single bank executive has been charged in relation to the worst financial crisis since the Great Depression that occurred in the late 1920s and 1930s.

To bailout financial institutions, Congress approved $700 billion to purchase mortgage-backed securities from banks and to directly supply them with cash.

Since 2012, JP Morgan Chase has settled for $13 billion, Bank of America paid $16.6 billion, Citibank agreed to pay $7 billion, while Goldman Sachs paid a separate $3.2 billion for related activities leading to the recession.

Most recently, Wells Fargo agreed to pay $1.2 billion for its improper mortgage lending practices.