| NEW YORK, July 26
NEW YORK, July 26 A deal to resolve a U.S.
regulator's claims against Goldman Sachs Group Inc over
mortgage-backed securities sold to Fannie Mae and
Freddie Mac leading up to the financial crisis could
cost the bank between $800 million and $1.25 billion, according
to a person familiar with the matter.
The person said Goldman Sachs is discussing a settlement
with the Federal Housing Finance Agency (FHFA), which filed 18
lawsuits against Goldman and other banks in 2011 over about $200
billion in mortgage-backed securities that later went sour.
Goldman Sachs and the FHFA declined to comment on Saturday.
The upper end of the range matches the amount Morgan Stanley
agreed to pay in February to resolve the FHFA's claims
against it. The person familiar with the matter said the
negotiations are still ongoing, and the final amount of any deal
remains fluid. The person was not authorized to speak publicly
on the matter.
The Wall Street Journal first reported the settlement talks.
The FHFA has recovered $16.1 billion in agreements with
other banks. Goldman is among four banks still facing FHFA
mortgage-related lawsuits, along with HSBC Holdings PLC
, Nomura Holdings Inc and Royal Bank of
Scotland Group PLC.
On Wednesday, Goldman, HSBC and Noumra argued that U.S.
District Judge Denise Cote in New York, who is overseeing the
litigation, should reconsider her decision that the agency did
not wait too long in suing the banks.
The renewed bid to dismiss the lawsuits based on timeliness
issues stemmed from a June ruling from the U.S. Supreme Court.
The court ruled in an environmental case that a federal law did
not preempt a state-law statute that placed time limits on
bringing a lawsuit that applied even if a plaintiff did not know
it had a claim.
But Cote warned the banks on Wednesday they faced a "steep
hill to climb."
Goldman Sachs and HSBC are scheduled to face trial Sept. 29.
A trial in the Nomura case is due for Jan. 26, 2015.
The case is Federal Housing Finance Agency v. HSBC North
America Holdings Inc, U.S. District Court, Southern District of
New York, No. 11-6189.
(Reporting by Lauren Tara LaCapra; Additional reporting by Nate
Raymond; Writing by Joseph Ax; Editing by Bernard Orr)