Wall Street Banks Cut Foreclosure Deal

January 17, 2013

Goldman Sachs and Morgan Stanley will pay a combined $560 million to settle charges that they wrongfully foreclosed on home owners.

The accord with the Federal Reserve calls for Goldman Sachs to pay $330 million, including $135 million in cash and the remainder in foreclosure assistance. Morgan Stanley will pay $227 million, $97 million of that sum in cash and the remainder in aid.

More than 220,000 borrowers will receive cash compensation, ranging from hundreds of dollars up to $125,000, depending on the type of error that led to foreclosure on their home. These borrowers were in foreclosure in 2009 and 2010.

Twelve major banks have now agreed to pay more than $9 billion to settle allegations of foreclosure abuses in 2009 and 2010.

Source: "Banks in Foreclosure Deal," The Wall Street Journal (Jan. 17, 2013)

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