A U.S. District Court judge has ordered Troy, Mich.-based Flagstar Bancorp Inc. to pay $90.1 million to Assured Guaranty Municipal Corp. as reimbursement for problematic mortgage-backed securities.
Bloomberg News reports that Judge Jed Rakoff, in a 103-page opinion, found Flagstar to be in violation of agreements with Assured after the home equity loans underlying two of Flagstar's securities defaulted. Assured, a bond insurer, was forced to reimburse the holders of the securities following the defaults.
Flagstar issued a statement that said it ‘strongly disagrees with the court's ruling and intends to vigorously contest the outcome on appeal.’