Jan 8 Goldman Sachs Group Inc and Morgan
Stanley are expected to agree as soon as this week to a
$1.5 billion settlement with federal regulators over botched
foreclosure claims, two sources familiar with the matter said on
The accord would come on the heels of a separate $8.5
billion settlement announced on Monday with 10 bigger mortgage
servicers, including America Corp, Citigroup Inc,
JPMorgan Case & Co, Wells Fargo & Co.
HSBC Holdings Inc, Ally Financial Inc,
EverBank Financial Corp and OneWest Bank FSB have also
said they are in settlement discussions with the Federal Reserve
and the Office of the Comptroller of the Currency.
The two sources did not want to be identified because they
were not authorized to speak publicly about the settlement.
A spokeswoman for the Federal Reserve reiterated a previous
statement that the Fed and the OCC continue to work with other
parties outside of Monday's accord to reach similar agreements.
Representatives of the OCC did not immediately respond to a
request for comment.
The expected settlement for Goldman and Morgan Stanley stems
from mortgage-servicing businesses that the two investment banks
purchased in the run-up to the subprime mortgage crisis, and
have since sold. Goldman had owned Litton Loan Servicing LP and
Morgan Stanley owned Saxon Capital Inc.
The Federal Reserve had ordered the two firms to conduct
case-by-case reviews of foreclosures after widespread mistakes
were discovered across the industry in the way U.S. banks had
processed home seizures. The settlement would end those reviews
and result in at least $1.5 billion in cash and assistance for