New York, NY, United States (4E) – Goldman Sachs Group Inc. agreed to pay $1.2bn to a U.S. housing regulator that oversees Fannie Mae and Freddie Mac to settle a lawsuit alleging the New York firm that it failed to disclose to buyers the risks on the mortgage bonds it sold prior to the financial crisis.
Federal Housing Finance Agency (FHFA) said on Friday that the Wall Street firm had agreed to pay $3.15bn to purchase mortgage securities it sold to Fannie and Freddie. The FHFA said Goldman’s penalty could reach around $1.2bn.
Bank of America paid around $6bn to buy back mortgage securities, while JPMorgan paid $4bn as part of its larger $13bn settlement. Morgan Stanley’s settled its FHFA lawsuit in February for $1.25bn, its biggest legal expense from the crisis.
The U.S. government will have recovered over $17bn from the 2011 legal cases against financial institutions, including Goldman’s latest settlement.