Flagstar Fined $3.6M By OCC Over Flood Act Compliance

By Al Barbarino (January 20, 2022, 4:53 PM EST) -- Flagstar Bank must pay $3.6 million to settle claims from the Office of the Comptroller of the Currency that it modified loans backing homes in flood hazard areas without first obtaining proof of adequate insurance, a violation of Flood Act requirements, according to a consent order published Thursday.

During the 2020 examination of the Michigan-based bank's Flood Act compliance program, the OCC uncovered violations of Flood Act regulations requiring banks to obtain proof of adequate insurance before they "make, increase, extend, or renew loans" secured by properties in designated "special flood hazard areas," the OCC said.

"The OCC determined that the...

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