A U.S. attorney is taking a novel approach to suing Deutsche Bank for the alleged "reckless" Federal Housing Administration (FHA) lending practices of its MortgageIT subsidiary with the case sending a chill through other government lenders who fear they, too, may be on the government’s hit list.

In unveiling the lawsuit in New York, U.S. attorney Preet Bharara said MortgageIT and Deutsche Bank "repeatedly lied" to the Department of Housing and Urban Development (HUD) about its quality control procedures for reviewing newly originated FHA-insured loans.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.