An agreement reached by Flagstar Bancorp Inc. on agency repurchase demands will cost it just a fraction of the amount it spent a month earlier for a similar settlement.
The parent of Flagstar Bank FSB issued a statement Monday indicating that it has reached an agreement with the Federal Home Loan Mortgage Corp.
With the settlement, the Troy, Mich.-based company resolves substantially all of the repurchase requests and obligations associated with loans originated from 2000 through 2008 and sold to Freddie Mac.
The amount of the settlement is $11 million, though paid claim credits and other adjustments cut it to $9 million.
Flagstar’s current reserves already cover the cost of the settlement.
“This agreement is another positive step for Flagstar in further reducing the company’s risk profile while supporting improved performance,” Flagstar President and Chief Executive Officer Alessandro DiNello said in the statement.
Flagstar disclosed a $122 million settlement with Fannie Mae in November that resolved repurchase demands and obligations on loans originated during the nine years ended Dec. 31, 2008.
Also today, Wells Fargo & Co. announced a $591 repurchase settlement with Fannie.
