Flagstar to record recovery from troubled commercial loan
Flagstar Bancorp in Troy, Mich., said it has no more exposure to a problem loan it disclosed earlier this year.
The $20.2 billion-asset company said in a press release Thursday that it had sold securities acquired as collateral for a loan to Live Well Financial.
Flagstar said it will report a $1 million recovery in the third quarter.
"I am very pleased to have put this situation behind us," Alessandro DiNello, Flagstar’s president and CEO, said in the release.
"Criminal and civil legal proceedings are progressing as expected against Live Well and its principals,” DiNello added. “We continue to cooperate with prosecutors and the SEC, and will otherwise actively pursue all legal remedies available to us."
DiNello said Flagstar is hopeful that it “will realize additional recoveries" tied to the loan.
Live Well, a mortgage company, defaulted on the loan in May; it would later file for bankruptcy protection. Flagstar fully provisioned for the loss during the second quarter.