FHFA Announces Near $2 Billion MBS Settlement With Deutsche Bank

The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, announced that it has reached a settlement with Deutsche Bank AG, related companies and specifically named individuals for $1.925 billion to resolve claims in FHFA v. Deutsche Bank AG, et al., as well as certain other matters. The settlement addresses claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, Deutsche Bank will pay approximately $1.63 billion to Freddie Mac and $300 million to Fannie Mae. As part of the settlement, FHFA, Fannie Mae and Freddie Mac will release certain claims brought against Deutsche Bank related to securities sold to Fannie Mae and Freddie Mac between 2005 and 2007. The settlement agreement does not release Deutsche Bank from any claims relating to LIBOR manipulation and does not include claims made against Deutsche Bank in two other PLS lawsuits presently the subject of ongoing litigation: FHFA v. SC Americas, Inc., et. al., and FHFA v. Countrywide Financial Corp., et. al. The other parties to those lawsuits were not part of the negotiations with Deutsche Bank. This is the sixth settlement that FHFA has attained pursuant to the 18 PLS lawsuits filed in 2011. FHFA remains committed to satisfactory resolution of the remaining actions.