(Reuters) - Barclays Plc agreed on Monday to pay $36.1 million to settle charges by Massachusetts that it hurt homeowners there by packaging subprime mortgages that the borrowers could not afford, and which violated state law, into securities. The British bank is the fourth big bank to settle probes by Massachusetts into securitization practices, according to state Attorney General Martha Coakley, who announced the settlement. Earlier settlements included $60 million by Goldman Sachs Group Inc in May 2009, $102 million by Morgan Stanley in June 2010 and $52 million by Royal Bank of Scotland Group Plc in November 2011, Coakley said. The securitization of home loans that quickly soured amid the U.S. housing downturn was a factor that contributed to the 2008 global financial crisis. While much of the subsequent regulatory scrutiny has occurred at the national level, many U.S. states have pursued their own probes as well. Massachusetts said that from late 2005 through 2007, Barclays financed and packaged adjustable-rate mortgages made by subprime lenders such as Fremont, New Century, Option One and WMC Mortgage that were "presumptively unfair" under state law. The state said these loans were unfair because the lenders did not reasonably believe that borrowers could afford them. It said the loans saddled borrowers with too much debt, teased them with low initial rates that would quickly rise, and imposed substantial penalties for necessary refinancings. "The troubling practices of these Wall Street securitization firms greatly contributed to the economic crisis that harmed Massachusetts residents," Coakley said in a statement. Barclays did not admit or deny the charges, and a spokesman said the bank is pleased to resolve the matter. Roughly $26.2 million of the settlement funds will help borrowers reduce principal and obtain other relief, while the rest will go to the state, municipalities, and non-profit organizations that assist with foreclosure relief. The case is Massachusetts v. Barclays Bank Plc, Superior Court of Massachusetts, Suffolk County, No. 13-3202. (Reporting by Jonathan Stempel in New York; Editing by Carol Bishopric)