Flagstar Bank has closed on the sale of a $474 million portfolio of non-insured non-performing residential first mortgages.
As National Mortgage News previously reported, Troy, Mich.-based Flagstar sold the portfolio at a loss to an undisclosed buyer. Had the deal closed at the end of 3Q10, it would have reduced Flagstar’s level of non-performing residential first mortgages by 70%.
When announced, proceeds from the sale were expected to be $209 million or 44% of book value and would result in a $132 million loss. JPMorgan Securities was the advisor on the sale.
The completed sale comes less than two weeks after Flagstar completed a $400 million public equity offering, comprised of 115.7 million shares of common stock priced at $1 per share and 14.2 million shares of convertible preferred stock.
Flagstar has an additional $86 million in non-performing residential mortgages available for sale. If sold, it could reduce Flagstar’s 3Q10 level of residential first mortgage non-performing loans by an additional 13%.
Parent company Flagstar Bancorp has $13.8 billion in total assets and is the largest publicly held savings bank headquartered in the Midwest, operating 162 branches in Michigan, Indiana and Georgia and 27 home loan centers in 13 states.