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May 11, 2012

Deutsche Bank Settles Mortgage Fraud Claims 
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The financial firm Deutsche Bank has agreed to pay the federal
government more than $200 million to settle charges of fraudulent
mortgage practices that cost taxpayers nearly twice that amount.
According to the settlement, a Deutsche Bank subsidiary insured its home
loans under a federal program despite not meeting the program’s
requirements. The federal government was forced to pay when the
mortgages later defaulted. In a statement, U.S. prosecutors with the
Southern District of New York said the bank and its subsidiary had used
federal insurance as "free government money to backstop lending
practices that did not follow the rules."

 

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