Goldman Sachs has agreed to a settlement worth USD 1.2 billion to resolve claims that it misled US mortgage giants Fannie Mae and Freddie Mac about risky mortgage securities it sold them before the housing market collapsed in 2007.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement yesterday with the Wall Street powerhouse.
New York-based Goldman Sachs sold the securities to the companies between 2005 and 2007.
Under the settlement, Goldman is paying USD 3.15 billion to buy back the securities from Fannie and Freddie.
The FHFA said the settlement was worth USD 1.2 billion because of the difference between what Goldman is paying and the current value of the securities. That means Goldman is paying USD 1.2 billion more than what the securities are now worth.
Published 23 August 2014, 07:46 IST