U.S. Accuses Deutsche Bank of Massive Mortgage Fraud

Federal officials unleashed a civil mortgage fraud lawsuit on Tuesday against Deutsche Bank DB and its mortgage arm, alleging the German banking heavyweight defrauded the U.S. government of hundreds of millions of dollars and engaged in reckless lending practices. The charges, which are set to be discussed in a 1 p.m. ET news conference, say Deutsche Bank and its mortgage unit, MortgageIT, lied to the U.S. by telling the Federal Housing Administration its low-income mortgages qualified for government guarantees when they did not. Once in the program, which is run by Department of Housing and Urban Development, the civil complaint says Deutsche Bank “recklessly selected mortgages that violated program rules in blatant disregard of whether borrowers could make mortgage payments.” Continue reading the article.