Barclays To Pay $36 Million Over Subprime Loan Allegations

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BARCLAYS BANK
Customers wait outside a retail branch of Barclays Bank for the bank to open in London, Tuesday, Feb. 12, 2013. Barclays PLC has announced plans to cut at least 3,700 jobs in a major restructuring that follows a scandal-hit year for the U.K. bank. The bank said Tuesday it will cut at least 1,800 positions in the Corporate and Investment Bank unit and 1,900 retail and business banking jobs outside the U.K. The cuts come after the British institution was forced to pay a $453 million fine for manip | AP

BOSTON -- Massachusetts Attorney General Martha Coakley says Barclays Bank PLC has agreed to pay $36.1 million to settle allegations it backed subprime home loans it knew were risky.

Coakley says the settlement filed in court Monday includes more than $25 million for reduction of principal and other relief for more than 450 subprime borrowers.

Those borrowers had loans securitized by Barclays in 2006 and 2007 with features such as "teaser" interest rates, high debt-to-income ratios and high loan-to-value ratios. Coakley said most are in Boston, Brockton, Lawrence, Lowell, Lynn, New Bedford, Springfield and Worcester.

The remaining settlement funds go to the state, communities affected by loan foreclosures and nonprofits involved in foreclosure relief.

Barclays says it is pleased to resolve the matter.

Coakley has made similar settlements with other institutions in recent years.

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