Flagstar Bank Stops Funding Non-Traditional Home Mortgages
Homes stand in a neighborhood in this aerial photograph taken over Chicago.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Flagstar Bancorp, one of the nation’s biggest lenders to mortgage providers, has stopped funding most new home loans without government backing.
The move, announced to its customers on Friday, deprives the housing market of one of the country’s 10 largest so-called warehouse lenders. Other lenders that make non-traditional mortgages to households will no longer be able to borrow from Troy, Michigan-based Flagstar to originate those home loans. Those who borrow from Flagstar to make larger government-backed mortgages will be able to get only 95% of the mortgage amount.