Flagstar pays $133M to settle mortgage fraud Feb 25 02:13 PM US/Eastern (AP) - Flagstar Bancorp Inc. has agreed to pay $133 million to settle claims its mortgage unit engaged in fraudulent lending practices. The U.S. government said in a release Friday it filed and settled a civil lawsuit against the Troy-based holding company for Flagstar Bank. The government says the bank improperly approved residential home mortgage loans for government insurance. U.S. Attorney Preet Bharara of the Southern District of New York said in a statement it's "another stark example of how certain lenders put profit ahead of responsibility." Flagstar Chief Executive Joseph Campanelli said in a release that the bank is "pleased to have resolved this matter." The complaint is the fourth suit filed by Bharara's office. The government last week sued and settled a $158 million case with Citibank subsidiary CitiMortgage Inc.