Goldman and Morgan Stanley Settle Wrongful Foreclosure Case

Goldman Sachs and Morgan Stanley will have to shell out a combined $557 million to resolve federal complaints of wrongfully foreclosing on homeowners.

The Associated Press (AP) reports the agreement is similar to deals 10 other major banks and mortgage lenders struck recently with the Federal Reserve, the nation’s central bank. A total of $9 billion will be paid by the 12 firms to resolve wrongful foreclosure complaints.

The settlements will help in compensating all the people whose homes were seized by the banks due to abuses such as "robo-signing," in which foreclosures were automatically signed off on by lenders that failed to properly examine the relevant documents.

Meanwhile, consumer advocates say that the regulators settled for too little by letting the banks off the hook for foreclosures that caused hundreds of families to lose their homes. The agreement helps eliminate huge potential liabilities for the banks, reports AP.

Under the deal, around 220,000 people foreclosed on by the two banks during 2009 and 2010 are eligible for payment. Payments will range from hundreds of dollars up to a maximum $125,000.

If you or a loved one suffered a wrongful foreclosure, contact Sokolove Law today for a free legal consultation and to find out if a consumer fraud lawyer may be able to help you.

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