The foreclosure document debacle, a huge embarrassment and liability for mortgage servicers, could soon also ensnare the banks that act as trustees for securitizations.

Deutsche Bank, the second-largest trustee of ABS in the U.S. according to Thomson Reuters, recently demanded that the servicers of its deals indemnify the German bank, and the investors it represents, against any "liability, loss, cost and expense of any kind" from "alleged foreclosure deficiencies or from any other alleged acts or omissions of the servicer."

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