A settlement between Flagstar Bancorp Inc. and the Federal National Mortgage Association resolves existing and potential repurchase demands on nearly a decade’s worth of loans.
The Troy, Mich.-based firm has reached an agreement with Fannie Mae to settle its outstanding repurchase demands with the secondary lender.
The settlement resolves repurchase requests and obligations on most of the loans it originated for Fannie between Jan. 1, 2000, and Dec. 31, 2008.
Flagstar disclosed the agreement in a filing with the Securities and Exchange Commission.
Even loans with no repurchase demands thus far are covered by the agreement.
The amount of the settlement is $121.5 million. After receiving credit for paid claim credits and other adjustments, the cash portion of the settlement is $93.5 million.
“This agreement represents another significant milestone in Flagstar’s resolution of legacy issues,” Flagstar President and Chief Executive Officer Alessandro DiNello said in a written statement.
A similar statement was issued by Fannie Mae Executive Vice President and General Counsel Bradley Lerman.
“This is another sign of progress in addressing outstanding issues, and we’re pleased to move forward with Flagstar,” Lerman stated. “It is important for Fannie Mae and lenders to focus on doing good, solid business today as we build a sustainable mortgage finance system for the future.”
