Saturday, September 17

US: Deutsche Bank knew mortgage companies lied

NEW YORK-Deutsche Bank AG in 2006, that a mortgage was preparing to buy it knew the Government lied about their mortgages still went ahead with the purchase and financially responsible be made should, the Justice Department said on Monday.

After action was the Department modified $1 billion Monday evening with U.S. District Court in Manhattan Deutsche Bank "on informed and expressly accepted responsibility" for misconduct at MortgageIT Inc, which bought it in 2007.

The Government first sued Deutsche Bank and MortgageIT in may, say, she misled to believe housing federal administration, issued by MortgageIT qualified mortgages for federal insurance, if the quality was so poor, that almost one-third in default.

Deutsche Bank had previously sought to partially close the complaint, arguing that the Government not to show that it adopted the MortgageIT obligations.

But the Government said the Bank, in the implementation of care prior to the merger, knew MortgageIT violated rules of the Department of urban development and the FHA in is, and false representations of the Agency.

It said that Deutsche Bank had had access to several letters indicating that MortgageIT does not check all the early payment defaults, and access to managers, who knew that misconduct took place.

"Regardless of their knowledge of the MortgageIT of unlawful behaviour, Deutsche Bank completed the merger with MortgageIT, according to which it expressly agreed, acquires gain all assets and liabilities of MortgageIT," the complaint said.

The Justice Department said that it learned first about the accused false claims, HUD in July 2010. Its action is to triple damages under any of the Federal false claims Act.

"Unlawful behavior supposedly not only after Deutsche Bank MortgageIT in January 2007 acquired, but it's even worse,", the Department said.

Deutsche Bank and a lawyer for the company responded immediately not to requests Monday evening for comment.

The amended complaint adds updated new examples of alleged false certifications and earlier information on the cost of the misconduct.

He said the more than 39,000 loans approved MortgageIT for FHA between 1999 and 2009 more than 12.900 insurance in default by June, to 12,500 in February.

He also said that the Government has paid more than $368 million on FHA insurance claims to about 3,200 by mortgages, compared with previous, higher payout estimated $386 million to 3,100 mortgages.

The amended complaint adds two Deutsche Bank units as defendants, DB structured products Inc. and Deutsche Bank Securities Inc., no individuals were indicted.

The case is U.S. v. Deutsche Bank AG et al, U.S. District Court, Southern District of New York, no. 11 02976.

Copyright 2011 Thomson Reuters.

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