Deutsche Bank to Pay $32.5 Million to Settle Mortgage Suit
Deutsche Bank AG (DBK), Germany’s biggest lender, agreed to pay $32.5 million to settle claims in U.S. litigation that it lied about the quality of home loans underlying securities it sold.
The investors that sued, including the Massachusetts Bricklayers and Masons Trust Funds, filed a motion for preliminary approval of the settlement in federal court in Central Islip, New York, today.
“The proposed settlement will provide a substantial monetary benefit to the settlement class,” lawyers for the plaintiffs wrote in the filing. U.S. District Judge Leonard D. Wexler must approve the deal.
Pools of home loans securitized into bonds were a central part of the housing bubble that, once burst, helped push the U.S. into the biggest recession since the 1930s. The market for mortgage-backed securities peaked at $2.3 trillion in 2007. Investors have filed class-action, or group, lawsuits against at least 16 private issuers of securities backed by mortgages.
The banks have argued the housing collapse, rather than any misrepresentation on their part, caused investor losses.
“We are pleased to have resolved this matter,” Renee Calabro, a spokeswoman for Frankfurt-based Deutsche Bank, said in a telephone interview.
Copy of the original filing below…