MBIA Settles Flagstar Mortgage Lawsuit for $110 Million
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MBIA Inc. said Flagstar Bancorp Inc. agreed to pay $110 million to settle a lawsuit accusing it of making misrepresentations to induce MBIA to insure mortgage-backed securitizations that defaulted.
MBIA, based in Armonk, New York, alleged that Troy, Michigan-based Flagstar sponsored two securitizations and avowed that it had originated or acquired all of the loans and each complied with underwriting guidelines, according to a complaint filed Jan. 11 in Manhattan federal court.