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66 GOLDMAN SACHS FHFA SETTLEMENT COULD REACH $1.25 BILLION Multiple reports surfaced near the end of last month that Goldman Sachs may be nearing a deal with the federal government to settle claims that it sold faulty mortgage, backed securities to Fannie Mae and Freddie Mac, according to people familiar with the negotiations. If a deal is reached, the monetary settlement is expected to fall between $800 million and $1.25 billion. e talks were first reported by the Wall Street Journal. e Federal Housing Finance Agency (FHFA) filed 18 lawsuits in 2011 against Goldman and other banks regarding $200 billion in mortgage-backed securities that later collapsed in the lead-up to the financial crisis. Goldman is one of four banks that have yet to settle with the FHFA. HSBC Holdings, Nomura Holdings, and Royal Bank of Scotland Group are the others. To date, the FHFA has recovered $16.1 billion from the first 14 settlements. e settlement would be the firm's largest legal penalty to date, easily eclipsing the $500 million it paid to the Securities and Exchange Commission over its handling of its marketing for mortgage-linked products. at settlement required Goldman to admit that it had made a mistake with the marketing of the security titled "Abacus." It remains Goldman's largest penalty to date. It is unclear if the settlement will also require some admission of fault. Still, it looks as though the decision to wait to settle with the government until the case was further along may have been the right move; the bank may end up paying far less than its counterparts. In the original suit brought by the government in the case at hand, the FHFA says that Fannie Mae and Freddie Mac bought a total of $11.1 billion dollars worth of securities from Goldman Sachs. An $800 million settlement would represent 7.2 percent of that total. Some banks that settled earlier with the FHFA have ended up paying 12 to 20 percent of the total securities that they sold. e case is currently scheduled for a September 29, 2014 trial if negotiations fail. The unemployment rate in the United States for the month of July 2014. Source: Bureau of Labor Statistics STAT INSIGHT 6.2%