DS News - Digital Archives

IN THE NEWS Flagstar to Pay $110M to Settle MBIA Securities Suit Flagstar Bancorp, Inc., and MBIA, Inc., announced a settlement between the two companies related to transactions on securities that faltered during the housing crisis. MBIA made the announcement on behalf of MBIA Insurance Corporation, which earlier this year filed suit against Flagstar for allegedly misrepresenting loans packaged in securities that MBIA insured in 2006 and 2007. The transactions involved approximately $1.1 billion of non-agency securities backed by second-lien loans, according to releases from both companies. Under the terms of the agreement, Flagstar will pay MBIA $110 million, an amount "consistent with [MBIA's] recovery expectations," MBIA CEO Jay Brown said. Troy, Michigan-based Flagstar does not expect any significant financial impact as a result of the deal. "Today's announcement represents another major milestone in putting legacy challenges behind us," said Flagstar president and CEO Michael Tierney. "We can now focus more time and attention on our national mortgage business and our community banking operations in Michigan." MBIA intends to use the cash received to pay a portion of its secured loan from National Public Finance Guarantee Corp. "We will continue to focus on resolving our remaining litigation with other parties so that National Public Finance Guarantee Corp., our U.S. muni-only insurer, can resume its role as a leader in the U.S. public finance insurance market," MBIA said in a statement. MBIA isn't the only bond insurer to bring action against Flagstar over securities. In February, a district judge ruled Flagstar must pay Assured Guaranty $90.1 million for defective securities, a decision the bank said it "intends to vigorously contest" in an appeal. STAT INSIGHT $10,110,000,000 Wealth lost as a result of foreclosures among residents of Michigan last year. Source: Alliance for a Just Society 96 Minnesota rank: 45 90+ Day Delinquency Rate Foreclosure Rate March 2013 1.4% Unemployment Rate 1.2% 5.4% year ago 1.6% 2.0% 5.7% year-over-year change -12.4% -41.4% -5.3% Top County IsanTI CounTy 90+ Day Delinquency Rate Foreclosure Rate March 2013 2.4% 2.6% year ago 3.0% 3.8% year-over-year change -21.7% -30.7% Top Core-Based statistical area FarIBaulT-norThFIeld, Mn 90+ Day Foreclosure Delinquency Rate Rate March 2013 1.6% 1.8% year ago 1.8% 2.8% year-over-year change -11.7% -37.6% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the March 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary March 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. Minnesota www.MinnesotaREO.com Bruce McAlpin Jeff Detloff Long H. Doan Maribel Garcia Garth Johnson Craig Murphy Michael Olsen 612-669-6324 952-829-2938 763-432-7640 612-821-7500 952-844-1511 763-533-9133 651-209-8444 IN THE NEWS Baby Boomers Plagued by Mortgage Debt as They Enter Retirement As the Baby Boomer generation heads into retirement, many are plagued with debt, and mortgage debt is their most common financial hardship, according to a study released by Securian Financial Group, a St. Paul, Minnesota-based financial services firm. Nearly half—49 percent—of current retirees retired with debt, and 38 percent hold at least $50,000 in debt. Among those who are near retirement, 67 percent expect to carry mortgage debt with them into retirement—the largest debt category cited in the Securian study. This figure is up drastically from 30 percent in Securian's last study, which was completed in 2009. "Mortgage debt is a dark cloud over pre-retirees' financial futures," said Michelle Hall, manager of market research at Securian. Credit card debt was the second-highest source of debt among pre-retirees. About 40 percent of pre-retirees expect to have credit card debt when they retire. The number of retirees whose debt exceeds their savings and investments is on the rise, according to the study. Forty-two percent of retired survey respondents fell into this category, up from 33 percent in 2009. Of those headed into retirement, 36 percent expect their debt to exceed their savings and investments when they retire. Twentythree percent anticipate their debt will be "much more" than their savings. "These numbers are troubling," Hall said. "For retirees on fixed incomes, debt payments are extremely burdensome and become more so as the cost of living rises." Securian also noted varying attitudes toward debt. A little more than half—53 percent of survey respondents—said debt is "something to avoid if at all possible." However, 19 percent view debt as "normal." Poli Mortgage, Norcom Mortgage Use AllRegs for Lending Library Poli Mortgage Group, Inc., and Norcom Mortgage recently announced they will be utilizing AllRegs, an information provider to the mortgage industry, to publish and maintain their libraries of mortgage underwriting guidelines. Through AllRegs, users can access an electronic table of contents with links to content, guidelines, and forms. An archiving feature also enables users to view revised content. Internal staff and business partners of Poli Mortgage and Norcom Mortgage will be able to access underwriting guide content through

• Cover