Deutsche To Pay $202M In FCA Case Over FHA-Backed Loans

Law360, New York (May 10, 2012, 7:07 PM EDT) -- Deutsche Bank AG will pay $202 million to settle False Claims Act allegations it oversaw an out-of-control mortgage underwriting operation and left the Federal Housing Administration, which insured the loans, holding the bag, the U.S. Attorney in New York said Thursday.

In their lawsuit, government lawyers said Deutsche and subsidiary MortgageIT took advantage of FHA mortgage insurance, which protects lenders against defaults with the goal of making home ownership possible for riskier borrowers.

The companies “recklessly selected mortgages that violated program rules in blatant disregard of...
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