NEW YORK (TheStreet) --Goldman Sachs (GS) has reached a $1.2 billion settlement with the Federal Housing Finance Agency in order to resolve a U.S. regulator's allegation that the bank sold Freddie Mac and Fannie Mae faulty mortgage bonds, Reuters reported.
Under the terms of the agreement, Goldman has agreed to repurchase mortgage-backed securities from the two financial companies for $3.15 billion.
The $1.2 billion is the amount the company will pay, without the estimated current value of the securities being repurchased from Freddie Mac and Fannie Mae, Reuters added.
The settlement halts a trial planned for Sept. 29 over two lawsuits brought against Goldman Sachs by the FHFA in 2011, as the agency looked to recover damages from a number of financial institutions regarding faulty mortgage bonds, Reuters noted.
Shares of Goldman Sachs are up 0.69% to $175.47 in pre-market trading on Monday.
Separately, TheStreet Ratings team rates GOLDMAN SACHS GROUP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLDMAN SACHS GROUP INC (GS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."