However, a Deutsche Bank spokesman denied the allegations.
Investigation on "Failure of Due Diligence"
1999 -2009, Mortgage IT participated in the "Direct Lender" project of the Federal Housing Administration (FHA) under the U.S. Department of Housing and Urban Development (HUD) and was entitled to issue loans guaranteed by FHA. The project requires participating institutions to carefully review and approve loans according to the rules of the Ministry of Housing and Urban Development, and a set of quality control (QC) procedures need to be implemented.
According to the regulations, before the approval of secured loans, due diligence is required to understand the borrower's financial status and the real situation of the transaction property. This step is carried out by direct lending institutions rather than FHA or the Ministry of Housing and Urban Development.
However, Preet Bharara, the prosecutor, said that Deutsche Bank had seriously violated the project rules and ignored the requirements on whether the borrower could repay the mortgage.
According to FHA data, in 2004, in a residential loan issued by the company in Hot Springs, Colorado, faced with the situation that the borrower had no credit record, the company did not collect payment information such as house rent, auto insurance, utilities and so on to establish records for evaluation, but directly issued the loan. As a result, six months later, the borrower defaulted.
What's more, in a real estate loan in Texas, the description of the borrower's working status in the application materials is inconsistent. At the same time, I worked in both X company and Y company, but no one found and questioned, and the loan was approved. Within five months, the borrower defaults.
Some people engaged in real estate agents said that the mistakes in these two cases were "very low-level". In other cases, the buyer "sponsors" the seller's down payment and falsely reports the value of the assets held. It is even more impossible to be discovered.
Is only a nominal QC.
In 2004, mortgage IT company hired outsiders to establish a set of QC (Quality Control) procedures and re-examine the approved loan cases. Soon, the problem was discovered and the company was informed by letter. However, these letters were put aside and not opened until the first QC manager of the company was found in early 2005 and opened again.
However, the problem has not changed.
The above-mentioned QC manager tried to establish a system within the company: the selected cases were first submitted to outsiders for preliminary review, and if there were any problems, the QC manager would explain to the branch department that applied for the loan, and then the QC manager would evaluate the problems and report them to the management.
However, this system has never been successful. QC managers often don't respond to the questions of loan branches. Although they have complained to the management, this is still the case.
What is even more ridiculous is the company's personnel arrangement in QC procedures. The QC manager mentioned above should have some people to assist in the work, but the fact is that one person's army. From the first quarter of 2006 to the end of business in 2009, a government loan auditor was the only person engaged in QC procedures in the company, and this person was also used for other purposes in 2007.
The indictment specifically mentions a case. The aforementioned external auditor and the quality control manager of the company found a series of cases of breach of contract in the Michigan branch of the company, all of which were related to a lender and an intermediary, and suggested that the management take action. However, it was not until 2006 that HUD discovered and informed the company that the company dealt with the problem.
Faced with these problems, the company's management has repeatedly stated that it has been rectified in the annual inspection, and the senior management has repeatedly signed that the company has complied with the relevant codes. But it didn't turn out as they claimed, and the problem lasted until the company closed down in 2009.
FHA said that it has paid $386 million in insurance reimbursement and related expenses for these loans, with $888 million still to be paid, and the amount of compensation may be even greater in the future.
A Deutsche Bank spokesman said: "We have just received the lawsuit and are currently discussing it. We believe that the allegations against mortgage IT and banks are unreasonable and unfair. " At the same time, the spokesman also said that they will defend the lawsuit.
The latest news
The credit rating of Deutsche Bank, Germany's largest bank, may be downgraded by Standard & Poor's, after the bank lowered its profit for 20 12 years due to rising litigation costs. Standard & Poor's issued a statement saying that Deutsche Bank's A+ long-term credit rating was listed as negative in credit observation.
Last week, Deutsche Bank announced that it had raised extra fees in response to the US mortgage litigation and investigations by other regulators, so the profit for 20 12 decreased by about 400 million euros (5140,000 USD) to 29 10/00,000 euros. Large banks around the world are facing investigations and lawsuits from regulators because they are accused of manipulating benchmark interest rates and improperly selling products such as interest rate derivatives. Deutsche Bank, led by * * * CEO Anshu Jain and Juergen Fitschen, said it had been listed as the defendant in "multiple" civil litigation cases of residential mortgage-backed bonds (MBS). Deutsche Bank used to be the issuer or underwriter of MBS.
Standard & Poor's statement pointed out that lingering economic, regulatory and litigation risks will still impact Deutsche Bank's performance.
Manipulate the price of gold
According to the Financial Times, German financial regulators are investigating possible manipulation of gold and silver prices and have asked DeutscheBank for documents.
According to people familiar with the matter, in the past few months, the German Federal Financial Supervisory Authority (Bafin) questioned employees of Deutsche Bank in several on-site inspections, highlighting how serious German regulators are in reviewing the precious metals market.
The German Federal Financial Supervisory Authority confirmed that it was investigating possible manipulation of gold and silver prices and the benchmark exchange rate, but declined to comment on which financial institutions were involved. Deutsche Bank also declined to comment.
Executives were forced to take a vacation.
In the global foreign exchange market survey, Deutsche Bank became the first foreign exchange trading bank to implement compulsory leave for business executives.
Kai Lew, the foreign exchange executive in charge of central bank sales at Deutsche Bank in London, has been forced to take a vacation. According to Lu's LinkedIn resume, she has worked at Deutsche Bank for eight years.
Suspected of manipulating LIBOR
20 14 In April, the Federal Deposit Insurance Corporation (FDIC) sued the world's largest 16 banks, accusing them of manipulating the London Interbank Offered Rate (LIBOR) and deceiving dozens of bankrupt banks.
The accused targets include Bank of America, Citigroup, Credit Suisse, Deutsche Bank, HSBC Holdings, JPMorgan Chase, Royal Bank of Scotland, ABN Bank of America, Rice Bank Group, Societe Generale, the Central Treasury of Agriculture and Forestry, Royal Bank of Canada, Mitsubishi UFJ Bank and Westbank.
This is a recent lawsuit accusing financial institutions of conspiring to manipulate LIBOR. As the global benchmark interest rate, LIBOR affects the global asset price of $550 trillion and financial products from mortgage to financial derivatives.
A huge loss of 6.2 billion euros in a single season
20 15 10 8. Deutsche Bank unexpectedly suffered a huge loss of 6.2 billion euros in the third quarter.