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Goldman Sachs said to be part of Fed-led foreclosure deal

WASHINGTON — Goldman Sachs, Morgan Stanley, and two other banks may agree to settle claims over botched foreclosures in an accord similar to one reached with 10 other loan servicers, two people briefed on the discussions said.

The agreement, which also involves HSBC Holdings and Ally Financial, would end case-by-case reviews of foreclosures under earlier accords with the biggest mortgage servicers, said the people.

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The Federal Reserve-led talks specified at least $1.5 billion in cash and aid for borrowers, one of the people said.

Ten servicers agreed Jan. 7 to an $8.5 billion settlement that ends the outside reviews in exchange for a deal that limits their costs to $3.3 billion in cash for foreclosures in 2009 and 2010 and $5.2 billion in other mortgage-related aid.

The new settlement could bring the industry payout to $10 billion and expand beyond the 14 firms required to review foreclosures under an April 2011 agreement.

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