Deutsche Bank Sued Over Fraudulent Loans
Deutsche Bank AG, Germany’s largest lender, was sued by a trustee over claims that some securities sold by a unit of the bank were backed by home mortgage loans taken out by fraudulent borrowers.
DB Structured Products Inc.’s pool of more than 1,500 mortgages included more than 320 that were defective, HSBC Bank USA, acting as trustee, said in a lawsuit filed yesterday in federal court in Manhattan.
“Borrowers lied, with or without the knowledge of the loan originators themselves, concerning how much money they owed, how much money they made, whether and where they worked, and where they lived,” HSBC claimed. “A handful of instances of such inaccuracies is perhaps to be expected. Hundreds of instances of borrower dishonesty is not.”
HSBC seeks unspecified damages and said Frankfurt-based Deutsche Bank must buy back the breaching loans under its agreements with the trustee.
Duncan King, a Deutsche Bank spokesman in New York, didn’t immediately return a voice-mail message left after regular business hours yesterday.
The case is Deutsche Alt-A Securities Mortgage Loan Trust v. DB Structured Products Inc., U.S. District Court, Southern District of New York (Manhattan).