By Matthew Vann
Banks continue to pay the price for wrongfully foreclosing on homeowners who should have been allowed to remain in their homes. The U.S. Federal Reserve said that Goldman Sachs and Morgan Stanley will pay a combined total of $557 million to settle federal complaints from homeowners.
Goldman and Morgan Stanley will pay $232 million in cash compensation to borrowers who qualify and $325 million for loan forgiveness and modifications.
A payment agent will be appointed to handout payments to borrowers on behalf of the banks, the Federal Reserve said in a news release. Eligible borrowers should expect to be contacted by the end of March with payment details.
Borrowers may receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of banking error that was made.
The terms of the deal are similar to the $8.5 billion settlement announced last week with several major U.S. Banks including Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora.