Deutsche Bank Agrees To Pay Maryland $95 Million In Record State Settlement

Deutsche Bank, a German-based global banking company, reached a $95 million settlement with the state of Maryland that will provide $80 million in relief to eligible consumers.

The settlement, announced last week by the Maryland Attorney General’s office, resolves civil claims that Deutsche Bank misled investors. Instead of lending directly to the consumer, the bank sold collateralized debt obligations and residential mortgage-back securities up until the financial crises.

The settlement is related to, but separate from the $7.2 billion settlement between the Department of Justice and Deutsche Bank that was reached in January and includes $4.1 billion for consumers.According to Maryland Attorney General Brian E. Frosh, the settlement was the largest such agreement reached by a state associated with the bank’s crisis-era RMBS practices.

The bank did not take the necessary steps to verify homebuyers’ credit worthiness, loan-to-value ratios and property values for mortgages that backed the securities.

In August 2014, Maryland and Bank of America reached a $75 million settlement agreement, which was shared by various governmental pension programs entities. An additional $150 million was shared among three states, including Maryland that went toward mortgage forbearance and forgiveness, affordable rental housing, community reinvestment and low- to- moderate-income lending.

In 2012, Maryland also participated in a $25 billion settlement with five mortgage companies, including Bank of America, Wells Fargo, JPMorgan Chase, Ally Financial and Citigroup, for abusing borrowers and breaking laws in the rush to push foreclosures. The state received a share of $1 billion.

This entry was posted in Maryland News and tagged , , , , , , , , . Bookmark the permalink.

Leave a Reply