US investigates Deutsche Bank in foreclosure case

Fri Jan 28, 2011 7:04pm EST

* Allegations Deutsche Bank filed false documents

* Inquiry could affect foreclosures across United States

* Testimony demanded from Deutsche Bank officials

By Scot J. Paltrow

NEW YORK, Jan 28 (Reuters) - A branch of the U.S.
Department of Justice is investigating whether Deutsche Bank
(DBKGn.DE) filed false documents and attempted to mislead a
bankruptcy judge in a foreclosure action.

Although the investigation involves the case of only one
homeowner in Connecticut, a court document filed on Jan. 26 by
the United States Trustee's Office said it wants to elicit
information about Deutsche Bank's practices in general in
foreclosure cases.

The inquiry involves Deutsche Bank National Trust Co, the
Deutsche Bank unit that acts as trustee for thousands of trusts
that invested in mortgage-backed securities. The U.S. Trustees'
Office is a division of the Department of Justice responsible
for overseeing administration of bankruptcy cases.

In recent months, the office has stepped up efforts around
the United States to block banks and law firms from using false
or fabricated documents in home foreclosure actions. The effort
follows disclosures in October 2010 of large-scale
"robo-signing", the mass signing of foreclosure affidavits
containing "facts" that had never been checked, and wide
production of false mortgage assignments.

The Jan. 26 court motion stated that "The United States
Trustee has reviewed the documents filed by Deutsche in this
case and has concerns about the integrity of those documents
and the process utilized by Deutsche in" filing to foreclose.

Jane Limprecht, spokeswoman for the U.S. Trustee's office,
confirmed that the examination was part of a nationwide effort
begun by the office in recent months to investigate suspected
improper actions by banks and other mortgage servicers in
foreclosure cases.

She declined to comment on the specific examination of
Deutsche Bank in the case.


April Charney, a Florida legal aid attorney who represents
homeowners in foreclosure cases and who is an expert on
mortgage securitizations, said that aside from possible
sanctions against Deutsche Bank in this foreclosure case, the
results could have significant effect on Deutsche Bank's
practices in general, and on its ability to foreclose on large
numbers of homeowners in default.

Lawyers for homeowners in foreclosure have alleged similar
practices by Deutsche Bank in cases around the country.

Charney said the evidence elicited in the inquiry could
apply to many other Deutsche Bank foreclosures by putting the
bank on notice that its practices have not been legal, and that
it may lack the basic authority even to bring many of the
foreclosure cases.

The document said that Deutsche Bank never presented
evidence in the case that it was ever authorized to serve as
trustee for the trusts.

Source: Reuters.Com