Deutsche Bank has reached a $95 million settlement with Maryland stemming from the housing crisis that will funnel $80 million to provide new mortgages or mortgage relief to eligible consumers as well as help finance affordable housing.

The settlement resolves civil claims that the bank misled investors. The bank did not lend directly to consumers but instead packaged and sold mortgages into complex securities known as "residential mortgage-backed securities and "collateralized debt obligations."

The settlement represents the state's negotiated share of a $7.2 billion settlement Deutsche Bank reached with U.S. Department of Justice in January that included $4.1 billion for consumers.

It's the largest such agreement reached so far by a state related to Deutsche Bank's conduct during the financial crisis, Maryland Attorney General Brian E. Frosh said Thursday.

"Deutsche Bank has acknowledged that it deceived investors about the quality of the residential mortgages backing their complex securities," Frosh said in the announcement.

Frosh said the bank failed to take steps such as verifying loan-to-value ratios, homebuyers' credit worthiness and property values for the mortgages that backed the securities.

"They didn't do due diligence," Frosh said in an interview. "They specifically didn't do it, and they admitted in a statement of facts they didn't do it."

Deutsche Bank officials declined to comment on the agreement with Maryland, a bank spokesman said.

For Maryland, the agreement with Deutsche Bank was among the largest related to the mortgage crisis. The state reached a $75 million settlement agreement with Bank of America in August 2014, which was shared by multiple governmental entities and pension programs. The state also shared in an additional $150 million with two other states that went toward mortgage forgiveness and forbearance, low-to-moderate income lending, community reinvestment and affordable rental housing.

Tribune Content Agency