Bank reaches $37.5M settlement
A Michigan bank with a large regional presence has reached a $37.5-million settlement with the federal Consumer Financial Protection Bureau.
Troy-based Flagstar Bancorp., the holding company of Flagstar Bank, said yesterday that it has agreed to pay $27.5 million to the agency for borrower remediation and $10 million in civil monetary penalties.
The settlement is related to the bank’s alleged violations of federal consumer financial laws, stemming from the bank's loss-mitigation practices and default servicing operations, dating to 2011.
The settlement does not include any admission of wrongdoing.
"This resolution is in the bank's best interest and allows us to continue building a great company that is poised for sustainable, long-term growth and value creation, benefitting our shareholders, customers and the communities we serve," said Sandro DiNello, president and CEO, Flagstar Bank.
"The dedicated employees of Flagstar Bank have completed thousands of successful loan modifications and work incredibly hard to meet and exceed the needs of our customers. With this matter now behind us, everyone at Flagstar Bank is committed to building on the significant progress we have achieved, while continuing to operate with integrity, responsiveness and a commitment to our core values."
Flagstar operates in 106 banks in Michigan and 32 home-lending centers in 18 states. It had $9.9 billion in assets as of June 30.