US Told To Redo $1B Deutsche Bank Mortgage Suit

Law360, New York (December 21, 2011, 7:13 PM EST) -- A federal judge on Wednesday ordered U.S. prosecutors to rewrite a $1.1 billion lawsuit claiming a Deutsche Bank AG subsidiary drained federal insurance with reckless mortgage lending, faulting the government's poorly drawn link between the subsidiary and the German megabank.

The government claims Deutsche Bank, via its MortgageIT Inc. subsidiary, defrauded its federal housing insurance program by doling out a host of government-insured mortgages to borrowers it knew shouldn't qualify.

But MortgageIT, a New York-based company that was once one of the largest mortgage originators in...
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