The Department of Justice holds Goldman Sachs accountable for their part in the lending collapse of 2008. The Department and Goldman agreed to $5.06 billion settlement. DOJ alleged that prior to 2008 Goldman Sachs was falsely assuring investors that the securities it was selling to them were backed by sound mortgages. These securities are referred to as Residential Mortgage Backed Securities (RMBS). Goldman Sachs was fully aware that the RMBS they were selling were not backed by sound mortgages. This illegal action led investors to buy these security-backed mortgages, which ultimately failed when the mortgagees defaulted on their mortgage payments. These continuous defaults from multiple pools of mortgages led to the housing bubble bursting. The banks were no longer bringing in money from the loans and the investors were losing their investments. Goldman Sachs’ actions cost both private and government entities billions. ...
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