Goldman, Morgan Stanley to pay $557 mln in foreclosure case deal

Jan 16 2013, 23:43 IST
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SummaryThe U.S. Federal Reserve said the two banks will pay $232 million to eligible borrowers and $325 million in loan modifications and forgiveness.

Goldman Sachs Group Inc and Morgan Stanley will pay $557 million in cash and other assistance to troubled borrowers to end a case by case review of foreclosures required by U.S. regulators.

The U.S. Federal Reserve said on Wednesday the two banks will pay $232 million to eligible borrowers and $325 million in loan modifications and forgiveness.

The agreement is similar to the $8.5 billion deal reached between the Fed, the Office of the Comptroller of the Currency, and 10 other bank servicers on Jan. 7.

The Fed had previously ordered Goldman and Morgan Stanley to review foreclosures conducted by mortgage servicing business the two investment banks purchased in the run-up to the subprime mortgage crisis and have since sold.

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