The US government filed a lawsuit Tuesday against Deutsche Bank AG and its mortgage subsidiary Mortgage IT in Manhattan court. The suit alleges that the Deutsche Bank and the mortgage subsidiary were untruthful about the low quality loans granted to homeowners, which were insured by a federal insurance program. According to the suit, the lenders profited from the resale of the loans.
The Federal Housing Authority stated the loans were granted without regard to whether the loan holder could make their payments and violated the rules of the mortgage-insurance program. The mortgages were then re-sold,and Deutsche Bank and Mortgage IT profited once the property went into default. The suit alleges the lenders knowingly defrauded the FHA, a claim they deny.
The FHA has paid millions in insurance for the defective loans, and is seeking triple damages along with punitive and compensatory damages under the False Claim Act.
The current foreclosure crises began with low-quality loans, and despite the increased regulation of mortgage lending practices many people still face foreclosure. The Mortgage IT is accused of submitting loans that weren’t eligible for FHA insurance, and falsely claimed the loans met the necessary criteria outlined by the feds.
Keeping up with a mortgage payment can be nearly impossible for people, hiring a foreclosure attorney can work to keep a person in their home. The practices of banks have caused a widespread crisis for the American homeowner. An knowledgeable foreclosure lawyer will guide the homeowner through the daunting process of foreclosure.
