U.S. Sues Deutsche Bank, Mortgage Unit
NEW YORK—U.S. authorities sued Deutsche Bank AG and a mortgage subsidiary, alleging that they repeatedly lied about the quality of mortgages to be included in a government insurance program so that they could profit from the resale of those mortgages.
The lawsuit, filed Tuesday in Manhattan federal court, alleges that Deutsche Bank and its MortgageIT unit "recklessly" selected mortgages that violated the rules of the Federal Housing Administration's mortgage-insurance program "in blatant disregard of whether borrowers could make mortgage payments." Those government-insured mortgages were then resold, according to the lawsuit.
The FHA program has paid more than $386 million in insurance claims and costs as of February as a result of Deutsche Bank and MortgageIT allegedly approving mortgages that didn't qualify for the program, the lawsuit said.
U.S. Sues Deutsche Bank Over Lending Practices - WSJ.com