US Sues Deutsche Bank For $1B Over Bad Mortgages

Law360, New York (May 3, 2011, 4:43 PM EDT) -- The U.S. filed suit Tuesday in New York against Deutsche Bank AG, seeking more than $1.1 billion over claims that subsidiary MortgageIT Inc. recklessly underwrote thousands of bad loans that were federally insured.

Filed in Manhattan federal court, the lawsuit alleges the Federal Housing Administration has paid out more than $386 million in insurance claims stemming from defaulted mortgages that MortgageIT approved for the U.S. Department of Housing and Urban Development Program. The complaint seeks treble damages.

The lender and its parent failed to maintain quality...
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