German lender Deutsche Bank AG (DB) has agreed to pay $32.5 million to investors to settle a mortgage lawsuit, according to media reports on Monday.
The investors that sued, including lead plaintiff Massachusetts Bricklayers and Masons Trust Funds, have reportedly filed a motion on Monday for preliminary approval of the settlement in federal court in Central Islip, New York.
"The proposed settlement will provide a substantial monetary benefit to the settlement class," lawyers for the plaintiffs reportedly wrote in the filing. The deal must be approved by U.S. District Judge Leonard Wexler.
The investors had alleged they were misled about the quality of mortgage loans sold to them in 2006 as highly rated securities. They filed a lawsuit against Deutsche Bank in 2008.
The settlement is among a handful with major banks to resolve claims that they misled investors into buying risky mortgage-backed securities amid the housing boom.
In December, Bank of America Corp.'s (BAC) Merrill Lynch unit said it would pay $315 million to resolve a lawsuit brought by investors in 18 mortgage-backed securities trusts.
Wells Fargo & Co. (WFC) agreed to pay $125 million to investors to settle litigation against the company, two weeks before a scheduled hearing in July.
In early February, the U.S. federal government and attorneys general from forty-nine states reached a landmark $25 billion settlement with the nation's five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses, the U.S. Department of Justice said.
The mortgage servicers who reached the settlement are Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Wells Fargo & Co., Citigroup Inc. (C), and Ally Financial Inc. (ALLY).
DB closed Monday's trading at $52.16, up $1.23 or 2.42 percent on a volume of 1.08 million shares.
by RTT Staff Writer
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