Goldman negotiating $1.25bn settlement over mortgage bonds -- report

by Ryan Smith29 Jul 2014
Goldman Sachs is reportedly negotiating a settlement over mortgage bonds that could cost the bank up to $1.25 billion.

Citing a source familiar with the matter, Reuters reported that Goldman Sachs is negotiating a deal with the federal government over mortgage-backed securities sold to Fannie Mae and Freddie Mac during the run-up to the financial crash.

The Goldman suit is one of 18 lawsuits filed by the Federal Housing Finance Agency against various banks. The lawsuits seek to recover damages for about $200 billion in shoddy mortgage-backed securities.

So far, the FHFA has recovered $16.1 billion from other banks, according to Reuters. Goldman is one of four banks still facing mortgage-related litigation from the agency, along with Royal Bank of Scotland, HSBC and Nomura Holdings.

The banks had argued that the FHFA had waited too long to file suit, but that argument was struck down by US District Court Judge Denise Cote. Last week, Goldman, HSBC and Nomura asked Cote to reconsider her decision, but Cote said they had “a steep hill to climb” to convince her to overturn that ruling, according to Reuters.

If no settlement is reached, Goldman and HSBC are both scheduled to face trial in September.


  • by Stan Btrody | 7/29/2014 10:16:06 AM

    Let me get this correct... Goldman Sachs, along with the other wall street investment banks effectively created the sub-prime market... then, in return for asinine fees, got the "rating agencies" to hold their combined noses, and issue AAA and AA+ ratings on the pools of mortgages it knew were bogus... not to mention obtaining equally corrupt CDO's (mortgage insurance) from the ilk of AIG... thereby laying the groundwork for the current depression... and our government is about to celebrate a $1.25Bn settlement... this amounts to chump change... and we are the chumps...

  • by sick of the Greed | 7/29/2014 11:18:13 AM

    Time to pay the piper. No sympathy for crooks.


Should CFPB have more supervision over credit agencies?