Flagstar Settles With Freddie Mac Over Mortgage Repurchase Obligations

(RTTNews) - Flagstar Bancorp Inc. (FBC), the holding company for Flagstar Bank FSB, said Monday that the Bank has entered into an agreement with Freddie Mac (FMCC.OB) to resolve substantially all of the repurchase requests and obligations associated with loans originated between January 1, 2000 and December 31, 2008 and sold to Freddie Mac.

The total resolution amount is $10.8 million, but after paid claim credits and other adjustments, the Bank will pay $8.9 million to Freddie Mac. The amount of Flagstar's current representation and warranty reserve specific to the loans covered by the agreement is sufficient to cover the payment amount.

"This agreement is another positive step for Flagstar in further reducing the Company's risk profile while supporting improved performance," said Alessandro (Sandro) DiNello, Flagstar's President and Chief Executive Officer. "We believe that our accomplishments in 2013 have positioned Flagstar for sustainable long-term growth in 2014 and beyond."