WASHINGTON (MNI) – The following was issued by the Federal Reserve
Thursday:

The Federal Reserve Board on Thursday announced a formal
enforcement action against the Goldman Sachs Group, Inc. and Goldman
Sachs Bank USA to address a pattern of misconduct and negligence
relating to deficient practices in residential mortgage loan servicing
and foreclosure processing involving its former subsidiary,
Litton Loan Servicing LP.

Goldman Sachs sold Litton to Ocwen Financial Corporation on
September 1, 2011 and has ceased to conduct residential mortgage
servicing. Litton is the 23rd largest mortgage servicer in the United
States. The action orders Goldman Sachs to retain an independent
consultant to review foreclosure proceedings initiated by Litton that
were pending at any time in 2009 or 2010.

The review is intended to provide remediation to borrowers who
suffered financial injury as a result of wrongful foreclosures or other
deficiencies identified in a review of the foreclosure process. The
foreclosure review will be conducted consistent with the reviews
currently underway at the 14 large mortgage servicers that consented to
enforcement actions brought by the banking agencies on April 13, 2011.

If Goldman Sachs re-enters the mortgage servicing business while
the action is in effect, it will be required to implement enhanced
corporate governance, riskmanagement, compliance, borrower
communication, servicing and foreclosure practices comparable to what
the 14 mortgage servicers are implementing. As noted in the April press
release, the Federal Reserve believes monetary sanctions are appropriate
and plans to announce monetary penalties.

These monetary penalties against Goldman Sachs will be in addition
to the corrective actions that Goldman Sachs will be taking pursuant to
todays action. Goldman Sachs has acknowledged in todays action that it
will be responsible for satisfying any civil money penalty that the
Board of Governors could have assessed against Litton for its conduct.

** Market News International Washington Bureau: 202-371-2121 **

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