Due To "Triple Damages" Under False Claims Act, Deutsche Bank Damages May Total More Than $1 Billion - Full Lawsuit Attached
Step aside Goldman Sachs, welcome Deutsche Bank: "This is a civil mortgage fraud lawsuit brought by the United States against Deutsche Bank and MortgageIT. As set forth below, Deutsche Bank and MortgageIT repeatedly lied to be included in a Government program to select mortgages for insurance by the Government. Once in that program, they recklessly selected mortgages that violated program rules in blatant disregard of whether borrowers could make mortgage payments. While Deutsche Bank and MortgageIT profited from the resale of these Government-insured mortgages, thousands of America homeowners have faced default and eviction, and the Government has paid hundreds of millions of dollars in insurance claims, with hundreds of millions of dollars more expected to be paid in the future... Deutsche Bank and MortgageIT had powerful financial incentives to invest resources into generating as many FHA-insured mortgages as quickly as possible for resale to investors... DB and MortgageIT repeatedly lied to HUD to obtain and maintain MortgageIT's Direct Endorsement Lender status.... Their violations of HUD rules were egregious." And what investors are focused on: "In this suit, the United States seeks treble damages and penalties under the False Claims act and compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence, and indemnification for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT. In addition, the United States seeks compensatory and punitive damages." And what is also notable is that this fraud persisted well past the housing crunch, continuing well into 2009 according to the lawsuit.
Bottom line: hit could be bigger than $1 billion.
- advertisements -