Judge In $1B MBS Contract Row Presses Flagstar Exec On Loans

Law360, New York (October 22, 2012, 9:20 PM EDT) -- A New York federal judge grilled a Flagstar Bank FSB underwriting executive Monday about a purportedly fraudulent home loan application approved by Flagstar in a contract suit by a New York insurer over nearly $1 billion in mortgage-backed securities issued by the bank.

New York District Judge Jed S. Rakoff, who is hearing the contract case in a bench trial, pressed Flagstar Executive Vice President Marni Scott during her direct testimony to explain the process behind granting one of the more than 16,000 home equity loans...
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