entire - Deutsche Bank Annual Report 2012

Deutsche Bank 02 – Consolidated Financial Statements 286
Financial Report 2010 Notes to the Consolidated Balance Sheet
28 – Provisions
Asset Backed Securities Matters. Deutsche Bank AG, along with certain affiliates (collectively referred to as
“Deutsche Bank”), has received subpoenas and requests for information from certain regulators and government
entities concerning its activities regarding the origination, purchase, securitization, sale and trading of asset
backed securities, asset backed commercial paper and credit derivatives, including, among others, residential
mortgage backed securities, collateralized debt obligations and credit default swaps. Deutsche Bank is cooperating
fully in response to those subpoenas and requests for information. Deutsche Bank has also been named as
defendant in various civil litigations (including putative class actions), brought under federal and state securities
laws and state common law, related to residential mortgage backed securities. Included in those litigations are (1)
a putative class action pending in California Superior Court in Los Angeles County regarding the role of Deutsche
Bank’s subsidiary Deutsche Bank Securities Inc. (“DBSI”), along with other financial institutions, as an underwriter
of offerings of certain securities issued by Countrywide Financial Corporation or an affiliate (“Countrywide”), as
to which there is a settlement agreement that has been preliminarily but not yet finally approved by the Court,
and a putative class action pending in the United States District Court for the Central District of California
regarding the role of DBSI, along with other financial institutions, as an underwriter of offerings of certain
mortgage pass-through certificates issued by Countrywide; (2) a putative class action pending in the United
States District Court for the Southern District of New York regarding the role of DBSI, along with other financial
institutions, as an underwriter of offerings of certain mortgage pass-through certificates issued by affiliates of
Novastar Mortgage Funding Corporation; (3) a putative class action pending in the United States District Court
for the Southern District of New York regarding the role of DBSI, along with other financial institutions, as an
underwriter of offerings of certain mortgage pass-through certificates issued by affiliates of IndyMac MBS, Inc.;
(4) a putative class action pending in the United States District Court for the Northern District of California
regarding the role of DBSI, along with other financial institutions, as an underwriter of offerings of certain mortgage
pass-through certificates issued by affiliates of Wells Fargo Asset Securities Corporation; (5) a putative class
action in the United States District Court for the Southern District of New York regarding the role of a number of
financial institutions, including DBSI, as underwriter, of certain mortgage pass-through certificates issued by
affiliates of Residential Accredit Loans, Inc.; and (6) a lawsuit filed by the Federal Home Loan Bank of San
Francisco (“FHLB SF”) pending in the United States District Court for the Northern District of California regarding
the role of a number of financial institutions, including certain affiliates of Deutsche Bank, as issuer and underwriter
of certain mortgage pass-through certificates purchased by FHLB SF. In addition, certain affiliates of Deutsche
Bank, including DBSI, have been named in a putative class action pending in the United States District Court for
the Eastern District of New York regarding their roles as issuer and underwriter of certain mortgage pass-through
securities. On April 5, 2010, the Court granted in part and denied in part Deutsche Bank’s motion to dismiss this
complaint. Each of the civil litigations is otherwise in its early stages.
From 2005 through 2008, as part of our U.S. residential mortgage loan business, we sold approximately
U.S.$ 85 billion of loans into private label securitizations and U.S.$ 71 billion through whole loan sales, including
to U.S. government-sponsored entities such as the Federal Home Loan Mortgage Corporation and the Federal
National Mortgage Association. We have been presented with demands to repurchase loans or indemnify
purchasers, other investors or financial insurers with respect to losses allegedly caused by material breaches of
representations and warranties. Our general practice is to process valid repurchase claims that are presented in
compliance with contractual rights. Where we believe no such valid basis for repurchase claims exists, we reject
them and no longer consider them outstanding for our tracking purposes. As of December 31, 2010, we have
approximately U.S.$ 588 million of outstanding mortgage repurchase demands (based on original principal
balance of the loans). Against these claims, we have established reserves that are not material and that we
believe to be adequate. As of December 31, 2010, we have completed repurchases and otherwise settled
claims on loans with an original principal balance of approximately U.S.$ 1.8 billion. In connection with those
repurchases and settlements, we have obtained releases for potential claims on approximately U.S.$ 21.9 billion
of loans sold by us as described above.