U.S. Attorney sues bank for 1 billion dollars for predatory lending

May 3, 2011:Officials from the Department of Housing and Urban Development and the U.S. Attorney in Manhattan plan to file a mortgage fraud lawsuit Tuesday against Deutsche Bank claiming reckless lending practices at its MortgageIT unit.

Preet Bharara, the U.S. Attorney for the Southern District of New York, alleges in the civil suit that the German banking giant and its mortgage-lending unit “repeatedly lied” to gain access to a government program. Then the bank “recklessly selected mortgages that violated program rules in blatant disregard of whether borrowers could make mortgage payments.”

The lawsuit seeks damages of $1 billion.

The U.S. attorney said the bank profited from the resale of the government-backed mortgages, while “thousands of American homeowners have faced default and eviction” and the government has paid hundreds of millions in insurance claims states Housing Wire.

Published by Stout Law Firm

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