Up to the minute closings and delays

Big banks forced to pay big bucks

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

NEW YORK—Wednesday, the Federal Reserve announced that two mortgage giants must pay $557 million for wrongfully foreclosing on homeowners.

Goldman Sachs and Morgan Stanley are accused of foreclosing on 220,000 homeowners who should have been allowed to stay in their homes.

Morgan Stanley will make $97 million in direct cash payments to borrowers and $130 million worth of other relief.

Goldman Sachs will pay $135 million to borrowers and offer $195 million worth of relief.

These are just the latest companies to receive such penalties.

In total, 12 firms will pay more than $9 billion in fines.

As part of the agreement, they are protected from future litigation.

However, not everyone is happy with the deal.

Consumer advocates say regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families.