Former Deutsche Bank Exec Accused of RMBS Fraud – NMP Skip to main content

Former Deutsche Bank Exec Accused of RMBS Fraud

Sep 12, 2017
The U.S. Department of Justice has filed a civil complaint in federal court against Paul Mangion

The U.S. Department of Justice has filed a civil complaint in federal court against Paul Mangione, former Deutsche Bank Head of Sub-prime Trading, alleging that Mangione misrepresented the characteristics of loans backing two pre-recession residential mortgage-backed securities (RMBS) that Deutsche Bank sold to investors, resulting in hundreds of millions of dollars in losses.
 
The complaint charged that sale of the $1 billion ACE 2007-HE4 security and the $400 million ACE 2007-HE5 was accomplished by misleading investors about the quality of the loans backing the securitizations. The complaint also accused Mangione with misleading investors about the origination practices of Deutsche Bank’s wholly-owned subsidiary, DB Home Lending LLC, the primary originator of loans included in the deals.
 
“The defendant fraudulently induced investors, including pension plans, religious organizations, financial institutions and government-sponsored entities, to name only a few, to invest nearly a billion and a half dollars in HE4 and HE5 RMBS, and caused them to suffer extraordinary losses as a result,” stated Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York. “We will hold accountable those who seek to deceive the investing public through fraud and misrepresentation.”
 
In January 2017, the Department of Justice settled a related RMBS matter with Deutsche Bank. Neither Mangione nor Deutsche Bank responded publicly to the complaint.

 
About the author
Published
Sep 12, 2017
MISMO Launches AI Governance Framework For Mortgage Lenders

New FRAME toolkit gives lenders, servicers, and technology providers a roadmap for managing AI risk while supporting innovation

CFPB Tells Lenders Immigration Status Can Factor Into ATR Analysis

CFPB frames immigration status as a potential ability-to-repay factor when future U.S.-based income is at risk

UAD 3.6 Deadline Nears; First American Earns Verification

First American's ACI Sky Workbench gains verification ahead of the Nov. 2 implementation date for the GSEs' updated appraisal reporting requirements

MISMO Introduces New Loan Boarding Standard

Wrapper Files support standardized data transfers between origination and servicing systems, with potential savings of $60 to $160 per loan

The GLBA Compliance Gap Your AI Deployment Just Opened

Old statutes, new models, and the vendor contract you signed before machine learning became operational

FHA Keeps Tri-Merge Credit Reports While Expanding Approved Scoring Models

HUD says FHA lenders will continue using three-bureau credit reports even as the agency adopts newer scoring models aimed at increasing competition and modernizing mortgage underwriting