The complaint against Deutsche Bank and its subsidiary MortgageIT filed on May 3, 2011, seeks damages and civil penalties under the False Claims Act. The government claims that the defendants wrongly represented to HUD that 39,000 mortgages submitted for FHA insurance were in compliance with HUD regulations. This use of the False Claims Act is new in the mortgage industry and may indicate the type of enforcement action the government is willing to take in the future where mortgage companies are concerned. The Commentary first appeared in Thomson Reuters "News & Insight" on May 13, 2011,under the headline "California Legal."
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