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Goldman Sachs, Morgan Stanley To Pay $557 Million To End Foreclosure Review

Major Banks To Fork Over Huge Sum To Troubled Borrowers
Reuters
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FILE - In this March 15, 2012 photo, a trader works in the Goldman Sachs booth on the floor of the New York Stock Exchange. Goldman Sachs announced Wednesday, Jan. 16, 2013 that its earnings almost tripled in the fourth quarter as investment banking revenues surged. (AP Photo/Richard Drew)

WASHINGTON, Jan 16 (Reuters) - 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.

Before You Go

The 10 Biggest Banks In The U.S.
10. Bank Of New York Mellon(01 of10)
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Total assets as of March 31, 2012: $300 billion. (Federal Reserve) (AP Photo) (credit:AP)
9. HSBC(02 of10)
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Total assets in the U.S. as of March 31, 2012: $340 billion. (Federal Reserve) (Frederic J. Brown/Getty Images) (credit:Getty)
8. U.S. Bank(03 of10)
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Total assets as of March 31, 2012: $341 billion. (Federal Reserve) (Wikimedia Photo) (credit:<a target="_blank" href="http://commons.wikimedia.org/wiki/File:USBank_Tower.JPG" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="MediaWiki:" data-vars-item-type="text" data-vars-unit-name="5bb2e47ce4b0480ca65e21f5" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://commons.wikimedia.org/wiki/File:USBank_Tower.JPG" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="0" data-vars-position-in-unit="0">MediaWiki:</a><a target="_blank" href="http://commons.wikimedia.org/wiki/User:MGA73bot2" role="link" class=" js-entry-link cet-external-link" data-vars-item-name="MGA73bot2" data-vars-item-type="text" data-vars-unit-name="5bb2e47ce4b0480ca65e21f5" data-vars-unit-type="buzz_body" data-vars-target-content-id="http://commons.wikimedia.org/wiki/User:MGA73bot2" data-vars-target-content-type="url" data-vars-type="web_external_link" data-vars-subunit-name="before_you_go_slideshow" data-vars-subunit-type="component" data-vars-position-in-subunit="1" data-vars-position-in-unit="1">MGA73bot2</a>)
7. Morgan Stanley(04 of10)
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Total assets as of March 31, 2012: $781 billion. (Federal Reserve) (AP Photo/Seth Wenig) (credit:AP)
6. MetLife(05 of10)
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Total assets as of March 31, 2012: $820 billion. (Federal Reserve) (AP) (credit:AP)
5. Goldman Sachs(06 of10)
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Total assets as of March 31, 2012: $951 billion. (Federal Reserve) (AP Photo/Richard Drew, file) (credit:AP)
4. Wells Fargo(07 of10)
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Total assets as of March 31, 2012: $1.33 trillion. (Federal Reserve) (AP Photo/CX Matiash) (credit:AP)
3. Citigroup(08 of10)
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Total assets as of March 31, 2012: $1.94 trillion. (Federal Reserve) (AP Photo/Mark Lennihan, File) (credit:AP)
2. Bank of America (09 of10)
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Total assets as of March 31, 2012: $2.18 trillion. (Federal Reserve) (AP Photo/Chuck Burton, File) (credit:AP)
1. JPMorgan Chase(10 of10)
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Total assets as of March 31, 2012: $2.32 trillion. (Federal Reserve) (AP Photo/J. Scott Applewhite, File) (credit:AP)
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