- Flagstar Bank is laying off approximately 400 employees after the acquiring company, Mr. Cooper, determined it didn’t need as many workers as initially planned.
- These layoffs are in addition to the 175 Michigan jobs Flagstar previously announced would be cut as part of the sale of its mortgage servicing business.
Flagstar Bank is laying off another 400 or so employees because plans to transfer them to another company have been canceled.
The employees are among a group of Flagstar workers whose jobs were affected by Flagstar’s $1.3 billion sale last fall of its mortgage servicing business and third-party origination platform, traditionally headquartered in Troy, to a Dallas-based company called Mr. Cooper.
In a statement, Mr. Cooper officials this week told the Free Press that, as part of the sale, more than 500 Flagstar employees have since moved over from Flagstar and joined Mr. Cooper. But Mr. Cooper determined it doesn’t need as many Flagstar employees as first anticipated, so roughly 400 are being let go.
Flagstar originally anticipated cutting about 175 Michigan jobs as part of the Mr. Cooper sale. The 400 additional layoffs will be on top of those earlier cuts.
“We are committed to being transparent and respectful during this time and are working in partnership with Flagstar to ensure team members are supported as they transition to the next phase of their careers,” the company said in a statement.
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Representatives for Flagstar and Mr. Cooper didn’t say whether all of the 400 affected employees are in Michigan, although Flagstar’s mortgage servicing business was located at its “regional headquarters” on Corporate Drive in Troy.
The Mr. Cooper statement says that once the onboarding of Flagstar employees is complete, about 350 servicing team members and 175 third-party originations team members will have moved over. The group of 175 will transition to Florida-based A&D Mortgage, which struck a deal last month to acquire Mr. Cooper’s wholesale mortgage-lending business.
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Flagstar was the No. 4 bank in Michigan last year based on total deposits, with 114 branches and offices, according to the Federal Deposit Insurance Corp. or FDIC. Its business traditionally focused on residential mortgage lending.
In late 2022, Flagstar was acquired by New York Community Bancorp., and the entire bank rebranded last fall as Flagstar Financial Inc.
Flagstar began in 1987 as a Michigan savings and loan started by Tom Hammond, and its original name was First Security Savings Bank. It changed its name to Flagstar Bank in the mid-1990s following a merger with Security Bank of Jackson.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl