Its representation and warranty reserve on mortgages sold was $25.2 million, compared to $124 million in the third quarter and $69 million a year earlier. Net interest income was essentially flat from the third quarter and a year earlier, at $74 million, while the net interest margin expanded by 5 basis points from a quarter earlier because of improved funding costs. Noninterest income jumped 142% from a year earlier, to $285.8 million, because of the decrease in representations and warrants, a 43% rise in loan fees and a 124% increase in gains on loan sales. Flagstar has spent the last few years trying to recover from the mortgage crisis. Earlier this month, the company said it would sell $1.2 billion in commercial loans in the Northeast to the commercial bank unit of CIT Group. It was also sued this month by MBIA over the condition of loans that backed $1.02 billion in securities that MBIA had insured.