News and Resources

Mortgage Litigation and the False Claims Act

Clinton R. Rockwell

May 13, 2011

On May 3, the United States filed a complaint in Manhattan federal court against Deutsche Bank and its wholly owned subsidiary, MortgageIT Inc., seeking damages and civil penalties under the False Claims Act.

The suit alleges that the entities made repeated false certifications to the U.S. Department of Housing and Urban Development (HUD), incorrectly claiming that loans submitted for insurance under the Federal Housing Administration's (FHA) Direct Endorsement Lender program complied with FHA requirements.

Specifically, the U.S. alleges that MortgageIT submitted more than 39,000 mortgages for FHA insurance between 1999 and 2009, certifying that each complied with all HUD rules.

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