Wellington Short Sale Update: Deutsche Bank In Hot Water
How did a bank from Germany become an owner of foreclosed properties here in South Florida? Deutsche bank holds title to more than 1,400 homes in Miami/Dade, Broward and Palm Beach Counties.
What is the problem with that?
According to local municipalities Deutsche Bank lets the houses become the blight of neighborhoods. The local towns levy fines, code violations and other fees against the bank. But how do they enforce anything on a bank overseas?
When the cities and towns try to collect and pressure Deutsche Bank they say they are just the “trustee”. That it is the responsibility of the servicers to take care of the foreclosed properties. The bank refuses to take responsibility of taking care of the homes they foreclose on. Yet, the towns, villages and cities all say that the title records list Deutsche Bank as the owner or record and therefore they are the ones responsible for keeping up and maintaining the properties.
In Ft Lauderdale, the city has fines of over $6 MILLION dollars pending against ONE property Deutsche Bank owns for failure to maintain this property. The property is located at 1032 NW Fourth Avenue. It is only 867 square feet and probably worth less than 20,000. It is boarded up.
South Florida code enforcement officials site Deutsche Bank with failure to:
These can pose health problems to the neighbors and ruins the value of other homes in the area.
Deutsche Bank does not do that in Germany. In fact, in Germany it is not so easy to get a loan to buy a home. Deutsche Bank requires 20% to 40% down on a property and they really scrutinize your employment and make sure there is little risk in giving a loan for a property. Rarely is there a foreclosure. They also don’t bundle mortages very often to sell as securities.
But here, Deutsche Bank got involved with selling mortgage backed securities from high risk loans. They are being investigated by the U.S. . Deutsche Bank did not directly give loans to borrowers here in the U.S. Instead, it bought MortgageIT who made reckless loans risky borrowers. When the interest rates went up many of those borrowers defaulted in large numbers.
The U.S government alleges that they lied about MortgageIT’s internal controls in order to qualify for FHA insurance. Being able to say that your securities were insured by the Federal Housing Administration made those investments highly marketable to investors.
Deutsche Bank settled this lawsuit in May to the tune of $203.3 Million dollars. There are other investigations under way.
Deutsche Bank is one of the world’s largest banks. It’s assets total $2.6 Trillion dollars. Deutsche Bank is 140 years old and had more than 1,000 branches in large cities and small towns in Germany.
Katerina Gasset is the author of http://www.wellingtonfloridashortsales.com. Katerina Gasset is the homeschool mother of 9 children and wife to Nestor Gasset. Katerina Gasset is also a writer, author, speaker, Realtor®, SEO coach, blogging coach and business entrepreneur and consultant.