The Federal Reserve announced Wednesday it reached a $557 million settlement with Goldman Sachs Group Inc. and Morgan Stanley over foreclosure abuses stemming from the so-called robo-signing scandal. The two big banks have agreed to pay $557 million in cash payments and other assistance to help mortgage borrowers. The settlement comes after 10 other big banks have reached an $8.5 billion similar settlement with federal regulators. The Fed said Goldman and Morgan Stanley were subject to "enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing." The settlement includes $232 million in direct cash payments to borrowers, some of which went through foreclosure. The banks have agreed to provide an additional $325 million in other assistance to homeowners, such as modifications on their mortgages or cuts to the amount borrowers owe. Four banks, including HSBC , are still in discussions with federal regulators over foreclosure issues.
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