News Summary: Goldman, Morgan Stanley paying $557M
SETTLING FORECLOSURE COMPLAINTS: Goldman Sachs and Morgan Stanley will pay a combined $557 million to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.
TOTAL $9 BILLION: The banks’ agreements with the Federal Reserve are similar to deals struck earlier this month with 10 other major banks and mortgage lenders. Combined, the 12 firms will pay more than $9 billion.
COMPENSATION: The settlements could compensate hundreds of thousands of Americans whose homes were seized because of abuses such as ‘‘robo-signing,’’ when lenders automatically signed off on foreclosures without properly reviewing documents. The agreements also will help eliminate huge potential liabilities for the banks.