Goldman Sachs, US agency in mortgage settlement worth $1.2 billion
Credit: Reuters/Lucas Jackson
A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014.
Negotiations between Goldman and the Federal Housing Finance Agency (FHFA) could be concluded as early as next week, the business daily reported, citing people familiar with the matter. ( on.ft.com/1q2eaOS)
The proposed amount would be almost double of what the Wall Street bank paid to the Securities and Exchange Commission in 2010 over similar issues. ( reut.rs/1t0fepd)
Goldman and FHFA were not immediately available for comment.
Goldman and Morgan Stanley are also in preliminary discussions with the U.S. Department of Justice about settling allegations that they mis-sold MBS, the British newspaper reported, citing three people with knowledge about the issue.
In its lawsuit, the FHFA said Fannie Mae and Freddie Mac bought $11.1 billion of mortgage-backed securities from Goldman, unaware that 'significant percentages of the underlying mortgage loans ... had materially poorer credit quality than was represented in the registration statements.'
On Thursday, Bank of America Corp reached a $16.65 billion settlement with U.S. regulators to settle charges that it misled investors into buying troubled mortgage-backed securities.
(Reporting By Sudarshan Varadhan; Editing by Saumyadeb Chakrabarty)
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