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Flagstar Bancorp Inc. (FBC) plans to slash 600 positions as part of a major restructuring initiative.

The Detroit-based bank, which is no stranger to change, said the reduction is expected to create annualized cost savings of $40 million for the company. The announcement arrives as the firm escapes legacy mortgage issues and refocuses on its future.  

But as part of this transition, change is to be expected. And a great deal of it is sweeping the bank as of late.  

Former CEO Michael Tierney officially announced plans last week to leave Flagstar Bancorp for good. The move came less than a year after he stepped down from the company’s top job.

Tierney was CEO when Flagstar was still dealing with legacy mortgage issues. Last year, the bank was forced to pay millions of dollars to settle with mortgage bond insurers over loan securitizations that ended up leading to extensive losses. The loans linked to Flagstar led to months of legal wrangling and then a series of settlements.

The lender announced the cuts as part of a broader initiative to focus on today’s lending environment.

"In 2013 we made important progress in resolving certain legacy issues, and we are now focused on further strengthening our financial and operational foundation," said Alessandro DiNello, Flagstar's President and Chief Executive Officer.  "We are committed to being a highly efficient and best-in-class operator in each of our businesses, and this restructuring will align our infrastructure with today's business environment, including the significantly reduced mortgage origination market."

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