Reckoning

Feds Sue Deutsche Bank

For reckless mortgage lending.

It took a while, but the federal government is suing Deutsche Bank for over $1 billion in a fraud lawsuit over reckless approval of low-quality mortgages blamed for sparking the financial crisis. The lawsuit says the German bank's New York-based home lender, MortgageIT, approved 39,000 mortgages for government insurance from 1999 to 2009 in "in blatant disregard" of whether the borrowers could pay. "Prudence was trumped by profits and good faith was trumped by good fees," U.S. Atty. Preet Bharara said at a news conference. Rene Febles, an investigator with the Department of Housing and Urban Development, called the suit "only the beginning,” hinting that the Deutsche Bank case could be the first of several attempts to crack down on financial institutions for the role in the mortgage meltdown.