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Flagstar Bancorp (FBC) in Troy, Mich., will pay $110 million to settle allegations that it misrepresented the quality of more than $1 billion of private label mortgage-backed securities it sold to investors.
May 3 -
Flagstar has asked the Treasury to delay the sale of its Tarp shares, will have to pay more than $90 million in connection with a bond insurer's lawsuit, and announced the sale of more commercial loans.
February 6
Flagstar Bancorp (FBC) will pay $105 million to settle allegations it misrepresented the quality of loans backing securities insured by Assured Guaranty (AGO).
The settlement ends a lawsuit filed by Assured in 2011 that charged $13.1 billion-asset Flagstar, based in Troy, Mich., with breaching warranties on $900 million in securities. Those securities were issued in 2005 and 2006 and backed by home-equity loans.
As part of the pact, Flagstar has agreed to drop an appeal of a February
Flagstar also will assume liability for future claims associated with two home-equity trusts that Assured insures. Flagstar said the obligation entitles it to receive future reimbursements for claims to which Assured would have been entitled. Flagstar added it will recognize $48 million in income because of the value of the assets in the trusts and the cancellation of accruals the company had earmarked for litigation.
The settlement frees Flagstar from the second of two lawsuits that charged it with misleading insurers of mortgage-backed securities issued in the run-up to the financial crisis. In May, Flagstar
"This agreement with Assured represents a favorable resolution of Flagstar's last remaining significant legacy legal matter," Alessandro DiNello, Flagstar's chief executive, said in a press release.
