HUD Reaches $202M Settlement With Deutsche Bank

HUD announced Thursday that it reached a $202 million settlement with ""Deutsche Bank"":https://www.db.com/us/ and Mortgageit over allegations of misconduct and false certifications with a government lender program.

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The agency said that Mortgageit acknowledged and accepted responsibility for false certifications it submitted to HUD in order to gain from a direct lender program under the ""Federal Housing Administration"":http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory (FHA).

For its part, Deutsche Bank admitted wrongdoing by failing to account for Mortgageit's activities before it made the decision to close down the unit in 2008.

The administration filed suit under the False Claims Act and U.S. District Judge Lewis Kaplan approved it.

Manhattan U.S. Attorney ""Preet Bharara"":http://www.justice.gov/usao/nys/ said in a statement that the institutions ""treated FHA insurance as free Government money to backstop lending practices that did not follow the rules.... Their failure to meet these requirements caused substantial losses to the Government ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô losses that could have and should have been avoided.""

A civil crimes unit helmed by Bharara's office will oversee the settlement as it moves forward.