Goldman and Bank of America both reach settlements

Bank of America

A federal judge approved Goldman Sachs’ $272m settlement with investors who claimed the bank misled them about the safety of billions of dollars worth of residential mortgage-backed securities.

Bloomberg News reports that U.S. District Judge Loretta Preska in Manhattan on Monday allowed the settlement, reached in August, to go forward, finding it is fair, adequate and reasonable.

The bank was sued in 2008 by pension funds led by NECA-IBEW Health & Welfare Fund of Illinois. The investors claimed Goldman Sachs provided inaccurate information about the appraisals and credit quality of home loans underlying the securities, whose value collapsed in the 2008 financial crisis.

In the meantime, Bloomberg also reports that Bank of America said it reached a $190m agreement to resolve a six-year-old legal claim from Federal Home Loan Bank of Seattle over mortgage-backed securities sold before the financial crisis.

The firm disclosed the April deal in a regulatory filing on Monday, noting it already set aside funds to cover the cost. Seattle Bank, one of a dozen government-sponsored regional lenders that supplied financing to member banks and finance companies, had accused Bank of America of making misstatements and omitting information about the quality of mortgages underpinning the securities.

Goldman Sachs $272 Million Mortgage Pact Approved By Judge

BofA Says It Settled Seattle Bank Mortgage Suit for $190 Million

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