Industry Update: the Future of eClosing and RON

Join industry experts for an in-depth discussion on the future of eClosing and how hybrid and RON closings benefit lenders and borrowers.

DOJ v. NAR and the ethics of real estate commissions

Today’s HousingWire Daily features the first-ever episode of Houses in Motion. We discuss the Department of Justice’s recent move to withdraw from a settlement agreement with the NAR.

Hopes for generational investment in housing fade in DC

Despite a Democratic majority, the likelihood of a massive investment in housing via a $3.5 trillion social infrastructure package appears slim these days. HW+ Premium Content

Road to the one-click mortgage

This white paper will outline how leveraging a credential-based data provider can save money for lenders, reduce friction for borrowers, speed time to close, and overall bring lenders one step closer to a one-click mortgage.


Deutsche Bank, MassMutual settle RMBS lawsuit

Federal judge okays motion to dismiss, terms not disclosed

A Deutsche Bank (DB) unit and Massachusetts Mutual Life Insurance Co. have reached a settlement over residential mortgage-backed securities, with a federal judge signing off on the undisclosed terms Thursday.

U.S. District Judge Mark Mastroianni green-lit a motion filed by both parties on Wednesday to dismiss the ongoing lawsuit.

No details about the settlement were disclosed in the motion, with the motions only stating that the two were settling.

“We are pleased to have resolved this matter,” Oksana Poltavets, assistant vice president for press and media relations at Deutsche Bank, Germany's largest bank.

The 2011 lawsuit arose over residential mortgage-backed securitizations that went south during the housing crash.

In its initial complaint, MassMutual alleged that Deutsche Bank’s representations were what convinced the insurance giant to buy $125 million worth of securities. The bank, the argued in their filing, was the “exclusive source of information” regarding the loans that backed the securities.

The company later discovered that Deutsche Bank allegedly disregarded their own underwriting standards, and had purchased loans issued to borrowers regardless of the ability to repay.

Deutsche Bank argued that both the allegations were untrue, and that MassMutual should have known that there was something wrong with the securitizations.

“The discovery record establishes that MassMutual’s awareness of supposedly ‘poor’ underwriting and potential appraisal inflation prompted MassMutual to begin a selloff of RMBS in late 2006,” the motion said.

They also argued that the statute of limitations for the lawsuit had expired, as the deals were all four years prior to the current lawsuit’s 2011 filing.

“MUSA’s four-year limitations period was triggered once MassMutual was on inquiry notice of its claims — i.e., the point in time that MassMutual had enough of a basis to suspect that it might have claims to cause it to investigate further,” the bank said in its filing. “If anyone knew what was going on in the world of RMBS, it would be MassMutual.”

Last August — in fact one year ago Thursday — Deutsche Bank and BayernLB agreed to settle an $810 million RMBS lawsuit.

In that lawsuit, BayernLB asserted that Deutsche Bank sold the securities to external clients while secretly criticizing them within the bank and ultimately profiting from their failure.

"Deutsche Bank originated, purchased, financed and securitized exceptionally high-risk loans into these RMBS, all while internally disparaging the poor quality of these loans and the RMBS they backed as 'pigs' and 'crap,'" according to the 2012 court filing from BayernLB.

In December 2013, the Federal Housing Finance Agency inked a $1.9 billion settlement with Deutsche Bank, settling claims related to alleged violations of federal and state securities laws.

The deal resolves another private-label mortgage-backed securities lawsuit filed against a major bank by the FHFA on behalf of Fannie Mae and Freddie Mac.
It ties back to claims that Deutsche Bank sold the two government-sponsored enterprises toxic loans while misrepresenting the overall quality of the pools.

The settlement effectively ended the FHFA v. Deutsche Bank lawsuit and resolved issues related to MBS purchased by the GSEs between 2005 and 2007.

Most Popular Articles

Are we back to a normal housing market?

Favorable demographics should keep the housing market ticking. But watch for home prices escalating out of control and rates moving up sharply, writes columnist Logan Mohtashami. HW+ Premium Content

Jul 26, 2021 By

Latest Articles

Blend launches housing equity program

Blend has launched Blend Impact, a program focused on increasing equity in housing and financial services with Blend’s nonprofit partners.

Jul 28, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please