Goldman and Morgan Stanley reach $557M deal in “robo-signing” case

TRD New York /
Jan.January 16, 2013 02:00 PM

Goldman Sachs and Morgan Stanley will shell out a combined $557 million to settle the federal government’s allegations that the banks foreclosed on homeowners who should have been allowed to stay in their homes, the Associated Press reported. The deal, announced today with the Federal Reserve, could compensate hundreds of thousands of homeowners who fell victim to “robo-signing,” when banks signed off on foreclosures without proper review.

About $232 million of the settlement funds will go to homeowners who faced foreclosure in 2009 and 2010; about 220,000 are eligible. The rest will be directed toward reducing mortgage balances and pardoning outstanding principal owed on houses that were sold for less than what mortgage borrowers owed.

Today’s deal is similar to one struck last week to the tune of $8.5 billion with Bank of America, JPMorgan, Wells Fargo and others. This group of banks will shell out $3.3 billion to nearly 4 million homeowners to end foreclosure review, with the remainder directed to mortgage modifications and principal forgiveness. [AP via Crain’s]Zachary Kussin


Related Articles

arrow_forward_ios
Gap Senior Director of Real Estate Jennifer Rondholz, Morgan Stanley Prime Property Fund head Scott Brown and 170 Broadway (Linkedin, Google Maps)

Lower Manhattan retail condo squeezed by lender as Gap refuses to pay rent

Lower Manhattan retail condo squeezed by lender as Gap refuses to pay rent
30 Hudson Street in Jersey City and WeWork CEO Sandeep Mathrani (Wikipedia)

WeWork scores big lease at Goldman Sachs’ Jersey City office tower

WeWork scores big lease at Goldman Sachs’ Jersey City office tower
A photo illustration of Goldman Sachs CEO David Solomon (Getty; iStock)

Goldman Sachs to juice cash-strapped RE owners with $3B fund

Goldman Sachs to juice cash-strapped RE owners with $3B fund
Goldman CEO David Solomon and 1 Flatbush Avenue (Credit: Michael Kovac/Getty Images; Hill West Architects)

Goldman reactivates real estate platform in NYC with big DoBro buy

Goldman reactivates real estate platform in NYC with big DoBro buy
Morgan Stanley CEO James Gorman (Photo by Andrew Burton/Getty Images)

Morgan Stanley on firm’s future: “Much less real estate”

Morgan Stanley on firm’s future: “Much less real estate”
522 Fifth Avenue, Morgan Stanley’s James Gorman and RFR Realty’s Aby Rosen (Credit: Getty Images; Google Maps)

RFR to buy Morgan Stanley’s 522 Fifth Avenue for $350M

RFR to buy Morgan Stanley’s 522 Fifth Avenue for $350M
The Coca-Cola building at 711 Fifth Avenue and Michael Shvo (Credit: Google Maps)

Michael Shvo, partners secure $545M loan for Coca-Cola building

Michael Shvo, partners secure $545M loan for Coca-Cola building
Silverstein Properties' Tal Kerret, Dino Fusco, Marty Burger and 7 WTC (Credit: Joe Woolhead)

Former Goldman exec will be new COO at Silverstein Properties

Former Goldman exec will be new COO at Silverstein Properties
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...