Deutsche Bank Reaches $7.2B Mortgage Settlement

Deutsche Bank has reached a tentative deal to resolve a federal investigation into its sale of toxic mortgage securities. The German bank will pay a $3.1 billion penalty, and provide relief to American consumers valued at $4.1 billion in the civil settlement. The suit is based on the bank’s sale of mortgage securities that contributed to the 2008 global financial collapse. The consumer portion will mostly be in the form of loan modifications and other assistance to homeowners. But the deal between the bank and the U.S. Justice Department is not yet final. Negotiations between DOJ and British bank Barclays to settle similar claims broke down last week, leading the government to file a lawsuit in the Federal District Court in Brooklyn.