Officials from the Department of Housing and Urban Development and the U.S. Attorney in Manhattan plan to file a mortgage fraud lawsuit Tuesday against Deutsche Bank claiming reckless lending practices at its MortgageIT unit.
Preet Bharara, the U.S. Attorney for the Southern District of New York, alleges in the civil suit that the German banking giant and its mortgage-lending unit "repeatedly lied" to gain access to a government program. Then the bank "recklessly selected mortgages that violated program rules in blatant disregard of whether borrowers could make mortgage payments."
The lawsuit seeks damages of $1 billion.
Read on.
According to the lawsuit, Deutsche Bank’s MortgageIT unit repeatedly lied to HUD about the quality of its mortgages. And of the more than 39,000 mortgages that Mortgage IT endorsed for HUD’s mortgage-insurance program, FHA, about one third of them defaulted. The government says that when an outside auditor showed MortgageIT its findings about serious problems in its mortgages, the auditor’s findings were literally shoved in a closet:
United State of America vs Deutsche Bank and Mortgage It, Inc
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