Several major media outlets reported on the agreement by Goldman Sachs and Morgan Stanley to pay $557 million in order to settle a Federal investigation regarding the firms’ mortgage practices. Most reports note the similarity to last week’s settlement among the OCC, Fed, and ten banks. Outlets such as Bloomberg and the Los Angeles Times also note that HSBC and Ally Financial remain in talks to settle, as well.

        Bloomberg News (1/17, Griffin, Hamilton) reports that Goldman Sachs and Morgan Stanley “agreed to offer a $557 million package of cash and other assistance for mortgage borrowers to settle a federal probe into allegations that the banks improperly seized homes.” The amount includes $232 million in direct payments to over 220,000 borrowers and $325 million in assistance, according to the Fed. The deal adds to the $8.5 billion settlement reached last week among the Fed, OCC, and ten banks. Bloomberg adds that “Morgan Stanley’s share of the accord totals $227 million, consisting of $97 million in cash and $130 million in other relief, according to two people briefed on the matter. Goldman Sachs will pay $135 million in cash plus $195 million in relief,” said the sources. HSBC and Ally Financial “are also preparing to sign on to the deal,” according to sources. “The OCC continues conversations with the remaining servicers,” said OCC spokesman Bryan Hubbard.

        The AP (1/17, Gordon) reports that “consumer advocates say regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families.” The piece notes that under the settlement, Goldman and Morgan Stanley will “pay a combined $232 million in cash compensation to homeowners to end an independent review of loan files required under a 2011 action by the Fed and the Office of the Comptroller of the Currency. The remaining $325 million will be used to reduce mortgage balances and to forgive outstanding principal on home sales that generated less than borrowers owed on their mortgages.” The AP adds that the structure of the deal is almost identical to last week’s settlement.

        The Wall Street Journal (1/17, Zibel, Moyer, Philbin, Subscription Publication, 2.29M) reports in a C3 article that the agreement demonstrates the problems faced by the two firms after their decision to create mortgage businesses shortly before the housing market collapse. A Goldman spokesman said, “We’re pleased to have resolved this matter,” while a Morgan Stanley spokesman said, “We are glad to have settled this matter.”

        Reuters (1/17, Viswanatha) reports that the deal helps the financial industry inch closer to ending problems related to the housing crisis that have dragged on for years.

        American Banker (1/17, Browdie, Subscription Publication, 7K) reports that “roughly 220,000 borrowers whose homes were foreclosed on in 2009 and 2010 by Litton Loan Servicing, a former unit of Goldman, and Saxon Mortgage Services, an ex-subsidiary of Morgan Stanley, are expected to receive cash payouts that range from hundreds of dollars to as much as $125,000 as part of the settlement.”

        The Los Angeles Times (1/16, Reckard, 692K) reports, “Previously, the Fed and the Treasury Department reached agreements with Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.” With Morgan Stanley and Goldman signing on, “more than 4 million borrowers will receive a total of $3.5 billion in cash compensation while an additional $5.5 billion will be provided by the servicers for mortgage assistance.”

        The Housing Wire (1/16), The New York Post (1/17, 498K), Dow Jones Newswires (1/16), The Hill (1/17, Needham, 21K), Forbes (1/16, 928K), CNN Money (1/16, O’Toole), Business Journals (1/17), The Seattle Post-Intelligencer (1/16, Robison, 114K), and MNI News (1/17, Odion-Esene) also reported on this story.