Credit Suisse reaches $5.28 billion mortgage bond settlement

For the second time in as many days, the Department of Justice announced that it reached a multi-billion dollar settlement with a foreign-based bank over its mortgage securitization practices leading up to the housing crisis.

On Tuesday, the DOJ announced that it reached a $7.2 billion settlement withDeutsche Bank in connection with the bank’s issuance and underwriting of residential mortgage-backed securities between 2005 and 2007.

Now, it’s Credit Suisse’s turn.

As with Deutsche Bank, Credit Suisse announced in late December that it reached a settlement in principle with the DOJ, but Wednesday, the DOJ made it official.

According to the DOJ, Credit Suisse will pay $5.28 billion in the settlement, which relates to the packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities between 2005 and 2007.

Under the terms of the settlement, Credit Suisse will pay $2.48 billion as a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act.

Read on.

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