A majority of the 1,200 Flagstar employees being let go in $1.4 billion sale of the company’s mortgage servicing business will be offered the opportunity to transfer to Dallas-based Mr. Cooper.
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New York Community Bancorp subsidiary Flagstar Bank is laying off 700 employees and will part ways with another 1,200 workers when it closes the $1.4 billion sale of its mortgage servicing business to Mr. Cooper later this year.
The 700 workers being laid off across Flagstar’s footprint represent about 8 percent of the company’s workforce.
But “the majority” of the 1,200 Flagstar employees being let go in the sale of the company’s mortgage servicing business “will be offered the opportunity to transfer to the buyer, facilitating a smooth transition and ensuring continued employment,” NYCB announced Thursday.
NYCB, which will rebrand as Flagstar Financial Inc. on Oct. 25, has struggled in the aftermath of its $2.6 billion acquisition of Flagstar Bancorp, which closed in 2022, and Flagstar’s $2.7 billion acquisition of troubled Signature Bank the following year.
Since disclosing “material weaknesses” in internal controls and a $2.7 billion fourth quarter loss in February, NYCB has overhauled its executive suite and raised money by selling off some of its operations.
JPMorgan Chase Bank in May agreed to buy nearly $6 billion in mortgages from NYCB. When the deal closed in July, Flagstar Bank exited the warehouse mortgage lending business.
Three days later, NYCB announced that it had reached a deal with mortgage servicing giant Mr. Cooper to sell Flagstar’s servicing business and correspondent lending platform.
NYCB has been trying…