Flagstar Bancorp (FBC) completed the sale of about $474 million residential first mortgage, non-insured, non-performing loans, as the largest bank holding company in the Midwest sheds underperforming assets. Officials weren't immediately available to comment further on the sale. JPMorgan Securities was sole financial advisor to Flagstar, which expects to receive $209 million or 44% of the book value of the loans before reserves from the sale. In the first week of November, Flagstar reaped proceeds of about $385.8 million from the sale of 115.7 million common shares and 4.2 million preferred shares. The bank said then it had an agreement to sell the non-performing mortgages and was attempting to divest another $86 million. The bank expects to incur a loss of $132 million from the sale, which lowers its level of non-performing, residential first mortgage loans by 71%. Flagstar also issued a series of hypothetical assumptions earlier this month saying its ratio of non-performing loans to total loans held "would have reduced to 5.2%, from 12.46%, and its ratio of non-performing assets would have reduced to 4.33%, from 8.25%" had the sale closed six weeks ago. But it didn't. In a press release Monday, the bank said "had the sale been completed on Sept. 30, the level of residential first mortgage non-performing loans would have declined by approximately 70%." Flagstar Bancorp, which has total assets of $13.8 billion, said the remaining $106 million of non-performing, residential first mortgage loans on its books are insured by either the Federal Housing Administration or Veterans Affairs. For the third quarter ended Sept. 30, the company reported a loss of $22.6 million, or 15 cents a share, down from a loss of $298.2 million the year earlier. Flagstar originated $7.6 billion in mortgages in the third quarter, up 38% from the second quarter and 15% higher than the year ago. The company operates 162 banks centers in Michigan, Indiana and Georgia, and 27 home loan centers in 13 states. Flagstar has received about $266.7 million in federal bailout funds. Write to Jason Philyaw.