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Deutsche Bank: We will help distressed U.S. homeowners. Not!

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Staff Writer | Saturday February 16, 2019 6:00AM ET
Deutsche Bank
America   The decision reverses pronouncements by Deutsche Bank

Deutsche Bank has decided that none of the more than $4 billion it promised to spend on consumer relief after the global mortgage crisis will go to distressed U.S. homeowners.


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Instead, the consumer-relief money will be spent on originating new loans, according to the Feb. 13 report by the bank’s monitor, Michael Bresnick.

The decision reverses pronouncements by the bank and the U.S. Justice Department that some of the funds - part of an overall $7.2 billion settlement over bad mortgage bonds sold before the 2008 crisis - would go to aiding people who were in imminent risk of defaulting on their mortgage payments, have especially high interest rates or owe more on their mortgage than in the value of their home.

The change in plans “may disappoint distressed homeowners and others, including the many individuals who have reached out to the monitor over the past two years, hoping to receive different types of consumer relief from the bank,” Bresnick wrote in the report, which was posted online.

The bank has already received consumer-relief credit for more than $1.5 billion spent on originating loans, the report said.

Bresnick wrote that he plans to provide a more detailed analysis of the loans that Deutsche Bank has submitted for consumer relief-credit, such as “where they were made and how the loans are similar to or different from those in the overall market.”

 

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