The US justice department has sued Deutsche Bank for more than $1bn, accusing the German lender and a subsidiary of lying their way into a government scheme that insured mortgages.
“Once in that programme, they recklessly selected mortgages that violated programme rules in blatant disregard of whether borrowers could make mortgage payments,” according to a civil complaint filed by the US Attorney’s office in Manhattan.
US officials allege that Deutsche and its MortgageIT arm profited from the resale of mortgages that would eventually leave thousands of Americans facing default or eviction while sticking the government with hundreds of millions in insurance claims.