Deutsche Bank Reviews MBS Unit
Deutsche Bank, a top-ranked issuer of subprime MBS, in the first quarter will conduct a top-to-bottom review of its entire mortgage business, according to officials at the company.
A spokeswoman for the bank confirmed that a review will soon be underway, adding that "there may be a reallocation of assets." Like many Wall Street firms, DB has both an active trading desk and a warehouse lending group that caters to the nonprime sector, a business that is in the throes of a historic correction. DB's trading desk is overseen by Michael Commaroto, who is listed in SEC documents as president of Deutsche Mortgage Securities.
In 2006, DB purchased Chapel Funding Corp., Lake Forest, Calif., a privately held nonprime lender. It also acquired the publicly traded MortgageIT Holdings Inc., New York, the nation's 21st largest lender for $429 million.
In October, DB laid off an untold number of workers at MortgageIT. (At the time a DB spokeswoman confirmed that layoffs had occurred but declined to comment further.)
When DB bought MIT it employed 2,100 full-timers in 50 branches. MIT became part of the bank's residential mortgage-backed securities business in New York.
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