Flagstar Fined $90 Million in Mortgage Repurchase Case
Flagstar Bancorp has been ordered to pay $90.1 million in damages — plus interest, court costs and attorney’s fees — for its failure to repurchase defective mortgages it guaranteed in two securitizations for insurer Assured Guaranty, HousingWire reported Feb. 6.
Assured sued Flagstar after it refused to repurchase defective loans underlying securities it guaranteed.
The suit alleged that Flagstar had made “pervasive and material breaches of representations and warranties” in some $900 million worth of securities that it insured for the firm. The insurer initially sought $108 million in damages.
Judge Jed Rakoff with the U.S. Southern District Court of New York issued his opinion Feb. 5, noting that “Assured has sufficiently proven that it should be reimbursed in full for all claims paid on the underlying transactions.”
The judge’s full decision may be found here.