Since the financial meltdown began in 2007, Deutsche Bank has been America's Foreclosure King, forcing tens of thousands delinquent homeowners onto the street. But now the German banking giant's frenzy to foreclose has reached a new level as it forecloses on properties it doesn't even own:
Rick and Sherry Rought of Gowen paid cash for the old house, a $14,000 fixer-upper, for their daughter, Hannah, while she attended Ferris State University.
Seven months later, after the couple started repairs and moved in furniture, Deutsche Bank National Trust Co. foreclosed, hired a company to "trash out" the Roughts' belongings, and changed locks and turned off utilities, according to a lawsuit filed Monday in U.S. District Court.
They believe that Deutsche, as trustee of Ameriquest Mortgage Securities Inc., didn't realize the house, repossessed in 2006, was not subject to foreclosure.
It is a nightmare that has happened across the nation as the economy tanked, the couple's attorney, Carlin Phillips, said at a press conference.
"It's like the Wild West right now in the foreclosure industry," he said.
No doubt that Deutsche Bank's underwriting, packaging and selling off toxic assets to public banks and pension funds have contributed to stellar earnings. But, as Anna Sleegers comments in the Frankfurter Rundschau, there is littler or no economic benefit to the bank's billions in earnings:
Volkswirtschaftlich sind die riesigen Gewinne im Kapitalmarktgeschäft dagegen weitgehend nutzlos. Darin liegt eine ungeheure Verschwendung intellektueller Ressourcen. Man stelle sich vor, dass die hoch qualifizierten Physiker und Mathematiker, die im Dienste der großen Banken an undurchsichtigen "Finanzprodukten" feilen, echte Innovationen hervorbrächten, die dem Gemeinwohl zugutekämen statt den Aktionären. (From an economic standpoint the huge profits the bank made in capital markets transactions are largely useless. Inherent in this this business is an enormous waste of intellectual resources. Just imagine if the highly skilled physicists and mathematicians created genuine innovation instead of constructing complex and impenetrable derivative products for the big banks - innovation that benefits the whole of society rather than just the shareholders of the bank. )
What is needed is tough new re-regulation of financial institutions to prevent future abuses of Goldman Sachs, Deutsche Bank and their peers.
Um hier langfristig umzusteuern, gehört die Spekulation eingedämmt. Die Banken sollten nicht mehr mit nutzlosen Finanzkonstruktionen handeln dürfen − weder auf eigene Rechnung, noch im Auftrag der Kunden. (This type of speculation must be reigned in if we are to change course. Banks should no longer be permitted to trade in useless financial instruments - neither for their own account or on behalf of customers.)