Key Developments: Flagstar Bancorp Inc (FBC)
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19 Jun 2013
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Latest Key Developments (Source: Significant Developments)
Flagstar Bancorp, Inc. Announces Appointment Of Chairman-Form 8-K
Flagstar Bancorp, Inc. reported in its Form 8-K that on October 1, 2012 John D. Lewis had been appointed a Director and the non-executive Chairman of the Company, subject to the receipt of non-objection from the Board of Governors of the Federal Reserve System. On February 12, 2013, the Company received non-objection from the Federal Reserve to Mr. Lewis serving as a Director and the non-executive Chairman of the Company. Mr. Lewis became a Director and the non-executive Chairman of the Company effective February 12, 2013. Full Article
Assured Guaranty Ltd Wins $90 Million Legal Ruling In Battle With Flagstar Bancorp Inc-DJ
Dow Jones reported that $90 million legal victory by Assured Guaranty Ltd. (AGO) against Flagstar Bancorp Inc. (FBC) over soured mortgages is signaling that bond insurers may prevail over home lenders in a thicket of battles over lax underwriting standards. The battle between Assured Guaranty and Flagstar is just one case in a web of lawsuits to stem from billions of dollars of mortgage-based bonds that soured in the wake of the financial crisis. Among the allegations Assured Guaranty leveled at Flagstar were that the loans the bank packaged into securities were ripe with defects and out of step with Flagstar's underwriting guidelines. According to Assured Guaranty, loans were made to borrowers with debts, or who stated their income at questionably high levels. U.S. District Judge Jed S. Rakoff concurred in a 103-page opinion issued, writing that Flagstar was notably unable to show actual instances where the loan files themselves did not contain material breaches of its guidelines. Full Article
Flagstar Bancorp, Inc. To Appeal Court Ruling On Assured Guaranty Municipal Corp
Flagstar Bancorp, Inc. announced that on February 5, 2013, the United States District Court for the Southern District of New York (the Court) issued a decision in the previously disclosed lawsuit filed by Assured Guaranty Municipal Corp., formerly known as Financial Security Assurance Inc. (Assured). The Court granted judgment in favor of Assured on its claims for breach of contract against the Bank in the amount of $90.1 million plus contractual interest and attorneys' fees and costs to be determined. Flagstar strongly disagrees with the Court's ruling and intends to vigorously contest the outcome on appeal. Full Article
CIT Group Inc Agrees To Acquire Commercial Loan Portfolio From Flagstar Bancorp Inc's Flagstar Bank
CIT Group Inc announced that it has agreed to acquire a commercial loan portfolio from Flagstar Bank (FSB), a wholly-owned subsidiary of Flagstar Bancorp Inc. Under the terms of the agreement, CIT Bank , the U.S. commercial bank subsidiary of CIT, will acquire approximately $1.3 billion in commercial loan commitments, of which approximately $800 million is currently outstanding. The assets represent a substantial portion of FSB's Northeast-based commercial loan portfolio, which consists primarily of asset-based, commercial real estate, and equipment finance loans and leases. The purchase is expected to be substantially completed during the first quarter of 2013. Full Article
The University of Michigan Athletic Department and IMG College Announces Partnership With Flagstar Bancorp, Inc.
The University of Michigan Athletic Department and IMG College announced that Flagstar Bank Inc, the bank headquartered in Michigan, has become an official partner of Michigan Athletics. The bank's support of U-M Athletics will focus on presenting sponsorships to two key digital assets, a student rewards program featured on a mobile app, and the university's official athletics website, mgoblue.com. The partnership was brokered by IMG College, which has been the multimedia rights partner for UM since 2008. Full Article
Flagstar Bancorp, Inc. Announces Senior Management Changes
Flagstar Bancorp, Inc. and its wholly owned subsidiary Flagstar Bank, FSB (the Bank) announced that their Boards of Directors appointed Michael J. Tierney to serve as President of the Company and the Bank, effective immediately, and as Chief Executive Officer of each entity, effective November 1, 2012, in each case subject to receipt of regulatory non-objection. Upon becoming CEO, Mr. Tierney will also become a director of the Company and the Bank. Mr. Tierney has served as Executive Vice President and Managing Director of Personal Financial Services at Flagstar since February 2011. Mr. Tierney will succeed Joseph P. Campanelli, who has served as Flagstar's President, Chief Executive Officer and Chairman of the Board of Directors since 2009. Mr. Campanelli will continue to serve as Flagstar's CEO and a director on the Flagstar Board until October 31, 2012, when he will resign to pursue other opportunities. Following his resignation as CEO and director, Mr. Campanelli will be available to support Flagstar in a transitional role. Flagstar also announced that John D. Lewis, Managing Director of Donnelly Penman & Partners and former Vice Chairman of Comerica Bank, has been appointed a director of the Company and the Bank and will serve as Non-Executive Chairman of their Boards of Directors, in each case subject to receipt of regulatory non-objection Full Article
Glancy Binkow & Goldberg LLP Announces Investigation of Flagstar Bancorp, Inc.
Glancy Binkow & Goldberg LLP announced that it is investigating potential claims on behalf of shareholders of Flagstar Bancorp, Inc. concerning possible breaches of fiduciary duties by the Company or its fiduciaries. Flagstar is the holding company for Flagstar Bank, FSB, which offers financial products and services to individuals and small- and middle-market businesses in Michigan, Indiana and Georgia. The investigation concerns a complaint filed February 24, 2012 by the U.S. Department of Justice (DOJ) in the United States District Court for the Southern District of New York alleging that for more than a decade Flagstar had been improperly approving thousands of residential home mortgage loans for government insurance. Specifically, the DOJ alleged that: (i) since January 2002 Flagstar routinely delegated key underwriting functions to staff employees who were not experienced underwriters; (ii) the underwriters falsely certified that they had themselves reviewed all of the loan documents and had exercised due diligence; (iii) Flagstar’s underwriters endorsed ineligible loans for FHA insurance but falsely certified to the Department of Housing and Urban Development that the loans were eligible. The same day the DOJ complaint was filed, Flagstar agreed to a settlement with the DOJ and agreed to pay $15 million within 30 days after court approval of the settlement and an additional $117.8 million upon meeting certain financial benchmarks, to repay $266.7 million. Full Article
Faruqi & Faruqi, LLP Announces Investigation Of Flagstar Bancorp, Inc.
Faruqi & Faruqi, LLP announced that it is investigating potential securities fraud at Flagstar Bancorp, Inc. (Flagstar or the Company). The investigation is focused on allegations made in a complaint filed February 24, 2012 by the U.S. Department of Justice (DOJ) in the United States District Court for the Southern District of New York. DOJ alleges that for more than a decade, Flagstar had been improperly approving thousands of residential home mortgage loans for government insurance. The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: since January 2002 Flagstar routinely delegated key underwriting functions to staff employees who were not experienced underwriters; Company underwriters falsely certified that they had themselves reviewed all of the loan documents and had exercised due diligence; Flagstar's underwriters repeatedly endorsed ineligible loans for FHA insurance but falsely certified to the Department of Housing and Urban Development that the loans were eligible for such insurance; and Flagstar set daily quotas for its underwriters and paid these employees substantial incentive awards for exceeding their daily quotas. Full Article
Ryan & Maniskas, LLP Announces Investigation Of Flagstar Bancorp, Inc.
Ryan & Maniskas, LLP announced that it is investigating potential claims against the board of directors of Flagstar Bancorp, Inc. (Flagstar or the Company) concerning possible breaches of fiduciary duty and other violations of law related to the U.S. Department of Justice (DOJ) complaint filed in the United States District Court for the Southern District of New York, Case No. 12-cv-01392, against the Company, which alleges that for over a decade Flagstar had been improperly approving thousands of residential home mortgage loans for government insurance. Specifically, the DOJ alleges that the Company: used unauthorized staff employees in the loan approval process; paid substantial incentive awards to these unauthorized employees for exceeding certain quotas; permitted underwriters to submit false certifications to the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD); and misled FHA and HUD by certifying that the loans had been fully underwritten by properly registered and sufficiently experienced underwriters when they had not. The DOJ further alleges that as a result of the foregoing, thousands of loans were approved for government insurance that did not qualify for insurance and when the loans defaulted, HUD was forced to cover the losses. Full Article
The Shuman Law Firm Investigates Flagstar Bancorp, Inc.
The Shuman Law Firm announced that it is investigating potential claims against certain officers and directors of Flagstar Bancorp, Inc. The Firm's investigation focuses on facts alleged in a U.S. Department of Justice (DOJ) lawsuit filed February 24, 2012, in which DOJ contends that the Company had been improperly approving thousands of residential home mortgage loans for government insurance for more than a decade. Specifically, the DOJ alleges that the Company: (i) used unauthorized staff employees in the loan approval process; (ii) paid substantial incentive awards to these unauthorized employees for exceeding certain quotas; (iii) permitted underwriters to submit false certifications to the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD); and (iv) misled FHA and HUD by certifying that the loans had been fully underwritten by properly registered and sufficiently experienced underwriters when they had not. The DOJ lawsuit claims that as a result of the foregoing, thousands of loans were approved for government insurance that did not qualify for insurance and when the loans defaulted, HUD was forced to cover the losses. Full Article
Flagstar to pay $110 million to settle MBIA mortgage lawsuit
NEW YORK - Flagstar Bancorp Inc said Thursday it would pay $110 million to settle a lawsuit by MBIA Inc accusing the bank of misrepresenting the quality of loans underlying $1.1 billion in mortgage-backed securities.
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