Press release from Business Wire
Law Offices of Howard G. Smith Announces Continued Investigation of Flagstar Bancorp, Inc.
Thursday, March 29, 2012
Law Offices of Howard G. Smith Announces Continued Investigation of Flagstar Bancorp, Inc.14:34 EDT Thursday, March 29, 2012 BENSALEM, Pa. (Business Wire) -- Law Offices of Howard G. Smith announces that it is investigating potential claims against Flagstar Bancorp, Inc. ("Flagstar” or the “Company”) (NYSE:FBC) and its board of directors concerning possible breaches of fiduciary duties by the Company or its fiduciaries. Flagstar is the holding company for Flagstar Bank, FSB, which offers consumer and commercial 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 reviewed all of the loan documents themselves and had exercised due diligence; (iii) 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 (iv), Flagstar set daily quotas for its underwriters and paid these employees substantial incentive awards for exceeding their daily quotas. 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, to make additional payments totaling an additional $117.8 million as soon as Flagstar meets certain financial benchmarks, and to repay $266.7 million that Flagstar received as part of the Troubled Asset Relief Program. If you purchased shares of Flagstar and still hold those shares, if you have information or would like to learn more about these claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at http://www.howardsmithlaw.com. Law Offices of Howard G. SmithHoward G. Smith, Esquire(215) 638-4847(888) email@example.com