Deutsche Bank Knew Lender Lied Before Merger: US

Law360, New York (August 23, 2011, 2:44 PM EDT) -- Deutsche Bank AG knew MortgageIT Inc. had recklessly underwritten thousands of suspect, government-backed loans before it bought the lender in 2007, making the financial giant responsible for its subsidiary's more than $1.1 billion worth of liabilities, federal officials said Monday.

In an amended civil complaint, the U.S. Department of Justice alleges Deutsche Bank conducted an extensive review of MortgageIT's lending practices prior the merger and discovered that the lender had misled the Federal Housing Administration into believing the mortgages it sold qualified for federal insurance, when,...
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