New Mexico recoups $24 million in mortgage-crisis settlement

New Mexico News

The New York Stock Exchange operates during normal business hours in the Financial District, Wednesday, Oct. 13, 2021, in the Manhattan borough of New York. Stocks are moving solidly higher in early trading on Wall Street at the beginning of a holiday-shortened week. Markets were reassured after President Joe Biden said he would nominate Jerome Powell for a second four-year term at the helm of the Federal Reserve, a vote of confidence in Powell’s handling of central bank policies during the brutal disruptions caused by the coronavirus pandemic. (AP Photo/John Minchillo, file)

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.

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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.

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