March 20, 2012
/PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Flagstar Bancorp, Inc. ("Flagstar" or the "Company") (NYSE: FBC).
The investigation is focused on allegations made in 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
. DOJ alleges that for more than a decade, Flagstar had been improperly approving thousands of residential home mortgage loans for government insurance.
The same day that the DOJ complaint was filed, Flagstar agreed to a settlement whereby the Company would pay
within 30 days after court approval of the settlement, and would make additional payments totaling an additional
as soon as Flagstar meets certain financial benchmarks. The Company also agreed that it would repay
that Flagstar received as part of the Troubled Asset Relief Program.
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) since
Flagstar routinely delegated key underwriting functions to staff employees who were not experienced underwriters; (2) Company underwriters falsely certified that they had themselves reviewed all of the loan documents and had exercised due diligence; (3) 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 (4) Flagstar set daily quotas for its underwriters and paid these employees substantial incentive awards for exceeding their daily quotas.
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toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to
. Faruqi & Faruqi, LLP also encourages anyone with information regarding Flagstar's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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