Deutsche Bank will pay a $202.3 million to settle claims that it committed mortgage fraud.The Frankfurt-based firm’s mortgage unit, MORTGAGEIT, purchased in 2007, had been charged with repeatedly filing false compliance certifications with the Department of Housing and Urban Development.
Deutsche Bank admitted guilt and accepted responsibility related to certain charges brought by the Department of Justice, including submitting certifications that certain loans were eligible for FHA mortgage insurance “when in fact they were not.”
The charges stemmed from Deutsche Bank’s participation in the government’s Direct Endorsement Lender program, which delegated authority to certain private lenders to endorse mortgages for FHA insurance.
The statement from Southern District of New York USAG Preet Bahara:
“Participation in the Direct Endorsement Lender program comes with requirements that are not mere technicalities to be circumvented through subterfuge as these defendants did repeatedly over the course of a decade. Their failure to meet these requirements caused substantial losses to the Government – losses that could have and should have been avoided. In addition to their admissions of responsibility, Deutsche Bank and MortgageIT have agreed to pay damages in an amount that will significantly compensate HUD for the losses it incurred as a result of the defendants’ actions.”