FRANKFURT Dec 28 German lender Landesbank
Baden-Wuertemberg has accused Deutsche Bank of fraud
in a $173 million lawsuit over the sale of mortgage-backed
securities during the financial crisis.
The complaint was filed in the New York State Supreme court
by LBBW and Spencerview Asset Management, over the purchase of
residential mortgage-backed securities (RMBS) in 2007, a court
Deutsche Bank on Friday said it believes the suit to be
without merit and that it will defend itself vigorously.
The plaintiffs allege that the bank created, issued, and
sold RMBS containing loans which the bank knew were defective,
and took trading positions that paid off when the mortgage
"Deutsche Bank's singularly negative view of these loans and
the RMBS they backed, led it, starting as early as 2005, to bet
against the U.S. housing market," the lawsuit said.
The plaintiffs said they feel misled about the claims made
about the mortgage underwriting standards, the appraisals of the
mortgaged properties, and other facts regarding the collateral
underlying the Deutsche Bank RMBS.