Deutsche Bank Faces Government Lawsuit Over Alleged Mortgage Fraud

The government will announce later today that it plans to move ahead with a lawsuit against Deutsche Bank and its subsidiary MortgageIT  over alleged mortgage fraud and “years of reckless lending practices,” according to a statement by the Justice Department.

The lawsuit alleges that Deutsche Bank’s MortgageIT unit repeatedly lied to the U.S. Housing and Urban Development (HUD) about the quality of its mortgages, according to a Wall Street Journal report. The lawsuit alleges that of the more than 39,000 mortgages that MortgageIT endorsed for HUD’s mortgage-insurance program, FHA, about one third of them defaulted.