Flagstar Bancorp (FBC) in Troy, Mich., has agreed to pay Fannie Mae $93.5 million to resolve repurchase claims on mortgages it sold to Fannie that later soured.
The total amount of the settlement is $122 million, but will be reduced after paid claim credits and other adjustments, Flagstar said. The loans were originated between Jan. 1, 2000 and Dec. 31, 2008 and Flagstar had $174 million set aside to cover potential losses associated with repurchase claims.
"This agreement represents another significant milestone in Flagstar's resolution of legacy issues," Alessandro DiNello, Flagstar's president and chief executive officer, said in a Wednesday press release.
The $11.8 billion-asset Flagstar agreed in June to pay Assured Guaranty (AGO) $105 million to settle charges that it had mislead the insurer about the quality of loans backing securities. It agreed to pay MBIA Insurance Corporation $110 million to settle similar charges in May.