June 15, 2015
Dear CEO Designate Cryan:
With the many problems you face as the new CEO of Deutsche Bank, the bank’s actions in one county in America may seem of very low importance. But to the people in cities, towns and neighborhoods in Palm Beach County, Deutsche Bank’s role as a major cause of neighborhood blight is very concerning.
In almost every county in the United States, Deutsche Bank often owns more foreclosed houses than any other bank. Deutsche Bank acquired most of these houses as trustee for hundreds of mortgage-backed securitized trusts. After the financial crisis of 2008, Deutsche Bank foreclosed on thousands of U.S. homes. Too often, after Deutsche Bank acquired these homes by bidding at county foreclosure actions, Deutsche Bank boarded the properties and walked away.
These houses have become blights in neighborhoods, as they stand, abandoned and poorly maintained, for many years. They are not rehabilitated and returned to the housing market, or donated to Habitat for Humanity, or to disabled veterans, or to the towns and cities that have provided water, sewer, storm water, police and fire prevention services.
As of June 10, 2015, Deutsche Bank owned over 300 residential properties here in Palm Beach County. In many cases, Deutsche Bank is a very bad neighbor. This is a link to ten Palm Beach County houses owned by Deutsche Bank as of June 10, 2015.
In some cases, Deutsche Bank has owned these houses for nearly five years. (Deutsche Bank acquired the house at 107 North B Street in Lake Worth, for example, in September 2010.) The overgrown yards attract rodents and pests, and the houses themselves pose a security risk to the neighborhoods. These houses drive down real estate values in the neighborhoods. Who would want to live on the same street with one of these Deutsche Bank owned houses?
Is it possible that Deutsche Bank does not want to disclose to the investors in the trusts that they have suffered substantial losses from these loans and foreclosures? Consider, for example, the house at 514 44th Street in West Palm Beach, Florida. Was this wood-frame house, built in 1948, ever worth the 2007 sales price of $250,000? Does Deutsche Bank expect to recover the amount of the foreclosure judgment – $359,629.55 – entered on May 1, 2014, plus the annual interest of 4.75%? Isn’t it more likely that American Brokers Conduit should never had made a loan for $237,500 to a 73-year old retiree to buy this property for $250,000? Isn’t this more likely an example of irresponsible lending, fueled by the securitization frenzy? This loan was funneled into American Home Mortgage Investment Trust 2007-1, a trust that held 5,340 loans and residential mortgages, valued at $1,901,018,000. Since its inception, Deutsche Bank National Trust Company has served as the Trustee for this trust.
Please promptly address the issue of Deutsche Bank’s abandoned houses. Please order that the liens levied by towns and cities be paid, and that the properties be rehabilitated and sold for a reasonable price or donated to non-profit organizations that will act responsibly.
Thank you for your attention to this issue.
Lynn E. Szymoniak
Director, Housing Justice Foundation
John Cryan, CEO Designate
Deutsche Bank AG
60262 FRANKFURT AM MAIN
cc: Dr. Sabine Reimer, BaFin (German Federal Financial Supervisory Authority)
Mr. Paul Achieitner, Chairman of the Supervisory Board, Deutsche Bank AG