The eastern Europe of the pre-WW II days was a fertile land of superstition. These have been introduced into many of the horror stories that have been popular in the west over the decades. Some examples of them follow.
Pure Jewish Soap
Witches and Warlocks
(Christians of course) wanted the fat of the unbaptized for their
magical purposes. Although Christians told these stories to each
others this same superstitious nonsense was picked up by the
local Jews. And thus we have variations upon the uses of the
bodies of the dead.
This continued into the "modern" era when soap was invented of which fat is a primary ingredient. The use of human fat was nothing more than the need for human fat by witches and warlocks to work black magic, for example, flying if they coated their boots with it. As to Jews the nature of the Nazis was of pure Christian evil it is not surprising that they were accused of rendering down unbaptized Jews for their fat.
And today even the most salacious writers about the holocaust no longer inclue the jewish soap stories although occasionally some survivor will report having found a barn full of it.