Goldman, Morgan Stanley settle foreclosure suit
WASHINGTON — WASHINGTON Goldman Sachs and Morgan Stanley
will pay a combined $557million to settle federal complaints that they
wrongfully foreclosed on homeowners who should have been allowed to stay
in their homes.
The agreements with the Federal Reserve announced
Wednesday were similar to deals struck earlier this month with 10 other
major banks and mortgage lenders. Combined, the 12 firms will pay more
than $9billion.
The settlements could compensate hundreds of
thousands of Americans whose homes were seized because of abuses such as
"robo-signing," when banks automatically signed off on foreclosures
without properly reviewing documents. The agreement will also help
eliminate huge potential liabilities for the banks.
Consumer advocates say regulators settled for too
low a price by letting banks avoid full responsibility for foreclosures
that victimized families.
Under the settlement, Goldman and Morgan Stanley
will pay $232million in cash compensation to homeowners to end an
independent review of loan files required under a 2011 action by the Fed
and the Office of the Comptroller of the Currency. The remaining
$325million will be used to reduce mortgage balances and to forgive
outstanding principal on home sales that generated less than borrowers
owed on their mortgages.
About 220,000 people whose homes were in
foreclosure in 2009 and 2010 are eligible for payments under the deal
with the two banks, the Fed said. The payments could range from hundreds
of dollars up to $125,000, depending on the type of possible error.
The structure of the deal is nearly identical to the $8.5billion settlement announced last week with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, MetLife Bank, PNC Financial Services,
Sovereign, SunTrust, U.S. Bank and Aurora. Those banks will pay about
$3.3billion to 3.8million homeowners to end the review of foreclosures.
The rest -- $5.2billion -- will go toward mortgage modifications and
principal forgiveness.
Two other banks were subject to the 2011 independent reviews. HSBC and Ally Financial
have been in discussions with regulators on similar settlements but
have yet to reach deals. Banks and consumer advocates had complained
that the loan-by-loan reviews required under the 2011 order were
time-consuming and costly and didn't reach many homeowners.
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So, let me get this straight...The banks knew what they were doing, they wrongfully foreclosed on people, had thousands of robo-signers...have decided to settle and will pay people back but only up to 125,000 depending on what type of error, they knowingly made?
Are you kidding me? The median home price in most metropolitan areas WAS $250,000.
HAS EVERYONE LOST THEIR F****** MINDS!??!?!?!?
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