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United States Sues Deutsche Bank and Subsidiary MortgageIT for Years of Reckless Lending Practices

Seeded on Tue May 3, 2011 7:56 PM EDT
Read ArticleArticle Source: United States Department of Justice
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NEW YORK – The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc.  The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S. Department of Housing and Urban Development (HUD) in connection with the residential mortgage origination and sponsorship practices of MortgageIT.  To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT.

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“As alleged, MortgageIT and Deutsche Bank ignored every type of red flag and breached every duty of due diligence before underwriting thousands of federally insured mortgages,” said U.S. Attorney Bharara. “While the homes the defendants issued loans for may have been built on solid ground, the defendants’ lending practices were built on quicksand. Ultimately, prudence was trumped by profit, and good faith took a back seat to good fees. This is exactly the kind of misconduct that our Civil Frauds Unit was created to combat.”

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Reply#1 - Tue May 3, 2011 7:57 PM EDT
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