Deutsche Bank AG said Friday it does not intend to pay $14 billion to settle civil claims with the U.S. Department of Justice for its handling of residential mortgage-backed securities and related transactions.
The bank confirmed in a statement that the Justice Department had proposed a settlement of $14 billion and asked the German bank to make a counter proposal.
“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts,” the Frankfurt, Germany-based lender said.
Deutsche Bank is among many financial institutions investigated over dealings in shoddy mortgages in the run-up to the 2008 financial crisis. The government has accused the banks of misleading investors about the quality of their loans.
Most Read Stories
- Elizabeth Warren: ‘The next step is single-payer’ health care
- Seattle No. 1 in home-price growth again; starter homes require half of income
- Costco is testing a new burger in Seattle, and it might remind you of Shake Shack
- UW study finds Seattle’s minimum wage is costing jobs
- Zillow vs. McMansion Hell: Seattle company not backing off fight with blog despite PR fiasco
Earlier this year, the Justice Department announced a roughly $5 billion settlement with Goldman Sachs over the sale of mortgage-backed securities. Other banks that settled in the last two years include Bank of America, Citigroup and JPMorgan Chase & Co.
The banks collectively came under scrutiny for the sale of securities that, while promoted as relatively safe, contained residential mortgages from borrowers who were unlikely to be able to repay their loans. The poor quality of the loans led to huge losses for investors and a slew of foreclosures, kicking off the recession that began in late 2007 as the housing market collapsed and investors suffered billions in losses.
The sums paid by some of the nation’s largest banks are intended to offer financial relief to some homeowners. They have not included criminal sanctions or penalties.