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Flagstar Declares One-for-10 Reverse Stock Split

May 28, 2010
Flagstar Bancorp, a top ranked thrift wholesale lender, late this week conducted a reverse stock split, issuing one share of common for each 10 shares held.

The reverse stock split will reduce the number of shares of outstanding common stock from roughly 1.53 billion to 153 million. The number of authorized shares of common stock will be reduced from 3 billion to 300 million. Over the past year, the thrift has been recapitalized with private investor money, which in turn has diluted the value of its common. Besides being a national residential wholesale funder, the depository has 162 branches in Indiana, Michigan and Georgia. The company will keep its current ticker symbol of FBC, but the shares will have a new CUSIP number.

Relative Mortgage Weakness Contributes to Flagstar's Loss

April 28, 2010
A relatively weak quarter for Flagstar Bancorp's mortgage business contributed to the Troy, Mich., company's nearly $82 million loss in the first quarter of 2010.

For the same period in 2009, the company lost over $67 million and in the fourth quarter of 2009, it lost approximately $72 million. Gain on loan sales fell from $96.5 million in the fourth quarter of last year to $52.6 million in the most recent period. This reflects a decline in interest rate locks on mortgage loans, from $7.9 billion in the fourth quarter of 2009 to $6.1 billion for the first quarter of 2010 as well as a decline in residential mortgage sales during the same period from $7.1 billion down to $5.0 billion and a decline in loan fees from mortgages from $27.8 million down to $16.3 million. Loan originations fell from $9.5 billion in the first quarter last year to $6.9 billion in the fourth quarter to $4.3 billion in the most recent period. Its servicing portfolio declined from $56.5 billion at the end of last year to $48.3 billion on March 31, 2010. During the first quarter, Flagstar had two bulk servicing sales totaling nearly $11 billion. Nonperforming residential first mortgage loans were $709.4 million at the end of the first quarter, up from $659.5 million as of Dec. 31, 2009, while nonperforming commercial mortgages increased to $395.8 million from $385.7 million during the same period.

Flagstar Offers Job Loss Coverage for Genworth-Insured Loans

April 7, 2010
Flagstar Bank, Troy, Mich., is offering a program to those borrowers who will have their mortgages insured with Genworth that will cover their mortgage payments if they lose their job involuntarily.

It is available at no charge on new loans and will cover the borrower's principal and interest, as well as tax and insurance, payments for up to $2,000 a month for up to six months during the benefit period, with a maximum of three monthly payments per job loss occurrence. The benefits are paid directly to Flagstar. The borrower's vesting period is 60 days after the loan closes and payments begin 30 days from the date of unemployment. The coverage is in place for up to three years after the loan closes, as long as MI coverage remains in place. Not covered under the program are seasonal, temporary or voluntary jobs, nor are those who are self-employed. A spokeswoman for Flagstar said Genworth is the only MI company the lender has this program, called Job Loss Protection, with.

Michigan Thrift Raising $250MM in Stock Offering

March 26, 2010
Flagstar Bancorp Inc. has priced a public offering of 500 million shares of common stock at $0.50 per share, which is below the stock's 52-week low.

Over the past 12 months, the stock hit a low of $0.54 per share on Dec. 16, 2009, according to Yahoo. On March 25, the stock closed at $0.72 per share. But after news that the offering is being priced at $0.50 per share, the next morning Flagstar opened at $0.54 per share. The company will receive total gross proceeds of approximately $250 million. The Troy, Mich., based company expects to close the sale on March 31, 2010. The underwriters will have a 30-day option to purchase up to an additional 75 million shares of common stock at the offering price, less underwriters' discounts and commissions solely to cover over-allotments. The public offering is being underwritten by Sandler O'Neill & Partners, L.P., as book-running manager, and Keefe, Bruyette & Woods, Inc., as co-manager.

IMA Offering $532MM in Servicing Rights

March 19, 2010
Interactive Mortgage Advisors, Denver, is selling $532 million of Fannie Mae servicing rights in an auction that closes March 31.

The package carries delinquencies and foreclosures of 3% and has a weighted average coupon of 5.4%. All of the loans are collateralized by properties in the Pacific Northwest. The seller's identity was not disclosed. A handful of other portfolios are on the market, including a $23 billion package of receivables from AmTrust Bank, and $10 billion in rights from Flagstar Bancorp. The AmTrust portfolio is being offered by Milestone Merchant Partners on behalf of the Federal Deposit Insurance Corp. IMA is the advisor on the Flagstar deal though it -- as well as the thrift -- have declined to talk about it.

AmTrust's $20 Billion Servicing Package Hits Market

March 15, 2010
Milestone Merchant Partners is now officially offering for sale a $20 billion package of residential servicing rights on behalf of the Federal Deposit Insurance Corp.

The offering has been rumored for several weeks. The receivables once belonged to AmTrust Bank of Cleveland, which failed late last year. A Milestone official told National Mortgage News that the offering process has now "officially" commenced. At press time no other details were available. The AmTrust portfolio is the largest bulk offering of servicing rights to hit the market this year. Flagstar Bancorp, Troy, Mich., is currently in the market with a $10 billion offering of servicing rights, but to date has declined to talk about the package. In other AmTrust news, Barclays Capital is getting ready to solicit bids for a $2 billion portfolio of loans from AmTrust, according to Asset Securitization Report, a sister publication to NMN.

EverBank Seen in the Hunt on Flagstar Portfolio

February 24, 2010
EverBank, Jacksonville, Fla., is negotiating to buy a $10 billion package of residential servicing rights from Flagstar Bancorp, according to investment banking sources familiar with the matter.

A spokesman for Flagstar said the company does not comment on rumors. EverBank did not return a call about the matter. The bid price is in the range of 75 basis points, said one official, but that figure could not be confirmed. According to the Quarterly Data Report, EverBank services roughly $46 billion in residential loans, ranking 22nd nationwide. If it winds up with Flagstar it would move up in the rankings to No. 20. Troy, Mich.-based Flagstar is one of the largest thrifts in the nation. In 2009 it lost $513.8 million compared to $275.4 million the year before. Despite its problems, its depository is considered "well capitalized" for regulatory purposes, with capital ratios of 6.19% for Tier 1 capital and 11.68% for total risk-based capital.

Parent of Top Wholesaler Comes Up Short on Capital Raise

February 10, 2010
Flagstar Bancorp Inc., which controls one of the nation's largest wholesale lenders, came up nearly $200 million shy of its capital-raising goal in a rights offering that expired earlier in the week.

The company is also in the process of trying to sell a $10 billion package of mostly Fannie Mae servicing rights. In an interview with American Banker, Flagstar CEO Joseph Campanelli acknowledged that the rights offering did not bring in as much capital as Flagstar desired. But he said the total was still in line with the capital level targeted in its business plan. The $300.6 million raised, he said, "brings us north of 8% capital, which we believe is a good, solid number." As part of a plan to diversify its portfolio this year, Mr. Campanelli noted recently that Flagstar would seek to broaden its revenue stream with ventures outside its national mortgage banking model. According to figures compiled by National Mortgage News and its Quarterly Data Report affiliate, Flagstar ranks eighth among residential wholesale funders with a quarterly run-rate just shy of $3 billion. Flagstar is also an active warehouse lender. In the fourth quarter it lost $72 million, an improvement over its third quarter loss of $298 million. Its shares continue to trade for less than $1 on the New York Stock Exchange.

Flagstar Posts 4Q Loss, But Originations Rise

February 2, 2010
Flagstar Bancorp, one of the nation's top ranked wholesaler funders, reported a fourth quarter loss of $71.6 million, an improved showing over the prior quarter and the same period last year.

Meanwhile, the Michigan-based lender originated $6.9 billion of home mortgages in the fourth quarter, a 28% increase in fundings from Q4 2008. For the full year, originations rose 15% to $32.4 billion. Even though its quarterly earnings improved, it lost $514 million for the full year, compared to a $275 million loss the prior year. At yearend Flagstar serviced $56.5 billion in loans. (It is currently shopping around a $10 billion package of receivables.) At year end it held $659 million of non-performing residential mortgage loans, a 51% increase from 2008. It also owns $338 in nonperforming commercial mortgages, a 67% spike from 2008.

Warehouse Commitments Remain Strong at Flagstar

January 29, 2010
Flagstar Bank is seeing continued growth in its warehouse lending business with the dollar volume of commitments to nonbank mortgage lenders rising 40% at year-end compared to the same period a year earlier.

According to figures reported to National Mortgage News, the Michigan-based thrift had $1.5 billion in commitments at December 31, compared to $1 billion in the same period a year earlier. However, even though its committed facilities were up handsomely, actual lines outstanding did not rise all that much year-over-year: $455 million versus $441 million. Flagstar, which earlier this week raised $300 million in fresh capital, ranks among the top five warehouse lenders in the nation.

Flagstar Raises $300 Million in New Capital

January 28, 2010
Flagstar Bancorp Inc., Troy, Mich., has raised $300 million of capital through a previously announced rights offering, which closes on Feb. 8, 2010.

The company's controlling stockholder, MP Thrift Investments LP, is purchasing an additional nearly 423 million shares of Flagstar common stock. That works out to a price of $0.71 per share. Flagstar was trading at $0.65 per share the morning of Jan. 28. In addition, Flagstar has entered into agreements with the Office of Thrift Supervision to address certain banking issues. Among other items, the agreements require the company to within 90 days, adopt specific timeframes for the remediation of certain issues related to mortgage servicing rights. It also within 30 days, must revise the asset concentration policy to establish the existing concentration limit for MSRs at a level consistent with the business plan. Todd McGowan joins Flagstar as its chief risk officer after 22 years at Deloitte Touche, where he last served as its regional quality risk management partner and advised companies in areas including enterprise risk management, business process controls, and Sarbanes-Oxley compliance.

IMA Offers Purchase 'Options' on $10B Bulk Deal

January 27, 2010
Interactive Mortgage Advisors is telling investors they can bid on all, or part, of a $10 billion package of bulk servicing rights that it is selling on behalf of an undisclosed firm.

The receivables are tied to mortgages controlled by Fannie Mae. The Denver-based IMA would not comment on the identity of the seller. (On Tuesday National Mortgage News reported that Flagstar Bancorp, Troy, Mich., is selling a $10 billion package of residential bulk servicing rights but the thrift would not comment.) IMA has set a Feb. 4 bid deadline on the package. In a statement the brokerage said, "Prospective purchasers will actually have the option of bidding smaller portions of $2 billion and $8 billion or the entire $10 billion." IMA is also selling an $11 billion package of jumbo servicing rights on behalf of Thornburg Mortgage of Santa Fe. That sale must first be approved by a bankruptcy trustee. Meanwhile, Milestone Merchant Partners is marketing a $20 billion package of rights that once belonged to the now-defunct AmTrust Bancorp, Cleveland.

Flagstar Selling $10B in Bulk Servicing

January 26, 2010
Flagstar Bancorp, Troy, Mich., is selling a $10 billion package of residential bulk servicing rights, according to investment banking sources.

The offering could hit the market as early as Tuesday afternoon. A company spokesman declined to comment. The thrift, which raised fresh capital last year, is also one of the nation's top wholesale lenders, according to figures compiled by National Mortgage News and the Quarterly Data Report. If the servicing sale is successful it would help the lender raise cash. Besides the Flagstar offering, two other large bulk deals are on the market: a roughly $20 billion package of rights from AmTrust Bancorp, Cleveland, and $11 billion from Thornburg Mortgage of Santa Fe. AmTrust's servicing is controlled by the FDIC. Thornburg is in bankruptcy.

Flagstar Sees Warehouse Commitments Rise 31%

December 18, 2009
Flagstar Bank saw its warehouse lending commitments to nonbanks rise 31% in the third quarter to $1.48 billion, according to figures compiled by NMN.

The thrift, one of the largest remaining S&Ls in the nation, is part of a shrinking base of depositories willing to extend credit to mortgage banking firms. However, its stock continues to trade for less than $1 a share. Despite raising nearly $620 million in capital this year, the $14.8-billion-asset company earlier in the week said it would be turning to shareholders for as much as $500 million through a rights offering. The fresh capital is likely needed to satisfy regulators, who have limited the Troy, Mich., company's ability to grow and imposed other restrictions on it. Among wholesale lenders, it ranks eighth, according to the Quarterly Data Report.

Flagstar Executive Cuts Remaining Ties with Company

December 9, 2009
Mark Hammond, the former president and chief executive of Flagstar Bancorp Inc., Troy, Mich., has cut all of his ties with the company by resigning as vice chairman and as a member of the board of directors of both the holding company and its thrift subsidiary.

"I believe that the time is right to focus all of my attention on my future endeavors," said Mr. Hammond in a statement issued by Flagstar. On Oct. 1, Mr. Hammond resigned his president and CEO posts. Joseph P. Campanelli replaced him. Mr. Campanelli later added the chairman's title after the resignation of Thomas Hammond, Mark Hammond's father. Flagstar was the 12th largest residential originator in the third quarter.

Analysts Think Capital Could Be an Issue at Flagstar

November 5, 2009
Analysts at FBR Capital Markets state they are worried about capital adequacy at Flagstar Bancorp Inc., Troy, Mich., as the company's tangible common equity ratio decreased to 2.75% from 4.01% at the end of the third quarter.

"We would encourage FBC to boost capital levels, as we expect credit headwinds to persist and remain elevated for some time. We are lowering our fiscal-year 2009 and fiscal-year 2010 earnings per share estimates to $1.85 and $0.30 from $1.25 and $0.20, respectively," said the report, written by Paul Miller, William Wallace and Jessica Halenda. FBR cut its price target by half to $0.50 per share from $1. Flagstar had missed the consensus estimate of $0.04 for its third-quarter loss and FBR's $0.10 estimate primarily driven by a $172 million deferred tax asset writedown in the quarter, which FBR estimated impacted EPS by about $0.38. The analysts added that they expect nonperforming assets at Flagstar to continue increasing over the next several quarters and are likely peak in mid 2010. FBR thinks Flagstar will start breaking even in late 2010 and begin posting positive EPS in 2011. In a section titled "The Other Side of the Story," the FBR analysts wrote. "If the economy recovers more quickly than expected and charge-offs do not continue to accelerate, lower credit costs could result in upside to our earnings estimates. With the government's support for the housing and mortgage markets, mortgage origination volumes could increase and benefit earnings. Higher earnings from mortgage originations could provide a cushion for higher credit costs."

Flagstar Posts Huge Loss, Offers Hints at Its Future

November 3, 2009
Flagstar Bancorp, the largest thrift player in mortgages, posted a $299 million loss in the third quarter, but vowed to continue investing in what it called its "position as one of the leading residential mortgage originators in the country."

Its new CEO Joseph Campanelli added, "We anticipate a significant level of industry consolidation and want to be active in that process. But in the near term, we will have to bring expenses into better alignment and make prudent operating decisions as we seek to broaden our earnings streams beyond our traditional mortgage activity." Its third quarter loss was almost triple the loss it suffered in the same period a year ago. The company stressed that its thrift unit remained "well-capitalized" for regulatory purposes, with capital ratios of 6.39% for Tier 1 capital. According to its earnings statement, the Michigan-based Flagstar funded $6.6 billion in residential loans during the quarter, a slight drop from the same period last year, but a 29% decline from the second quarter. Despite the loss, there was some good news in the numbers: its gain-on-sale of loans grew to 137 basis points compared to just 33 bps a year ago. At the end of September Flagstar serviced $53.2 billion in loans, which paid a weighted average service fee of 32.6 basis points. Non-performing residential real estate loans grew to $606 million at the end of the third quarter, up from $588 million at the end of the second quarter. A year ago it held $305 million of delinquent loans. Its non-performing commercial real estate loans climbed to $420 million. According to the Quarterly Data Report, Flagstar is the nation's 11th largest residential funder and ranks 18th among servicers.

Hammond Leaving Flagstar, Son Remains VP

October 23, 2009
Thomas J. Hammond is retiring as chairman of both Flagstar Bancorp Inc. and its subsidiary Flagstar Bank FSB, Troy, Mich., the latest step in the ownership shift in the company.

On October 1, Mr. Hammond's son, Mark Hammond, stepped down as president and chief executive, and was replaced by Joseph P. Campanelli. Mark Hammond remains as vice chairman of the company. In a statement, Thomas Hammond said, "It has been approximately 10 months since the acquisition of Flagstar Bank by the new majority owners. The new CEO has strong banking experience and understands the decisions necessary for Flagstar to be competitive in this business environment." Flagstar's board will meet shortly to elect a new chairman.

Campanelli Takes Charge at Flagstar

October 1, 2009
Joseph P. Campanelli has been hired as president and chief executive at Flagstar Bancorp Inc., Troy, Mich.

Mr. Campanelli will replace Mark T. Hammond, who had served as Flagstar's president since 1995 and CEO since 2002. He is the former president and chief of Sovereign Bank and its parent Sovereign Bancorp Inc., Philadelphia. Mr. Campanelli said, "Flagstar has an excellent core franchise, a dedicated and skilled workforce and a strong market position originating and servicing residential mortgages. We have a great future ahead of us." For the second quarter, Flagstar was the nation's 11th largest originator with volume of $9.3 billion, according to the Quarterly Data Report. The QDR lists Flagstar as the nation's 18th largest servicer as of June 30, 2009, with a portfolio of $61.5 billion.

Flagstar Not in Compliance with NYSE Standard

September 17, 2009
Flagstar Bancorp Inc., Troy, Mich., has been notified by the New York Stock Exchange that it does not satisfy one of the exchange's standards for its common stock to continue to be listed.

The average closing price of Flagstar's common stock was less than $1 per share over a consecutive 30-trading-day period. Flagstar has six months to cure the situation. To do so, its common stock price and the average share price over a consecutive 30-trading-day period both must exceed $1 per share. The company's common stock remains listed on the NYSE under the symbol "FBC", but the exchange will assign a ".BC" indicator to show that the company is below the quantitative continued listing standards. Flagstar must notify the NYSE, within 10 business days of receipt of the non-compliance notice, of its intent to cure this price deficiency.

Flagstar's Volume Below First Quarter's But Above a Year Ago

July 29, 2009
Flagstar Bancorp, Inc., Troy, Mich., saw its mortgage banking unit's loan production in the second quarter decline compared to the first quarter, but it was still better than it was during the same period last year.

The company's agency-dominated loan production decreased to $9.3 billion for the second quarter, as compared to $9.5 billion in the first quarter, but increased from the $8.2 billion seen in the second quarter of 2008. The company as whole took a $76.6 million net loss, compared to $67.4 million during the same period a year ago. "Although it is always disappointing to lose money, we were able to continue to generate positive income on an operating basis and are encouraged by ... improvement in mortgage delinquency trends that we experienced towards the end of the quarter," said Mark T. Hammond, Flagstar's chief executive officer.

Flagstar Looking for New CEO

June 9, 2009
Mark Hammond will step down as president and chief executive of Flagstar Bancorp — one of the nation's largest wholesale lenders — by the end of January, the company disclosed.

The lender, the nation's eighth largest wholesaler according to the Quarterly Data Report, said it will conduct a search for a new president and chief executive and consider both internal and external candidates. Mr. Hammond has been Flagstar's president since 1995 and its CEO since 2002. He started the company in 1987. He will retain his position as vice chairman of the board of both the holding company and its thrift affiliate. Mr. Hammond also will remain as a "non-officer executive advisor" to Flagstar.

Flagstar Cuts Wholesale Conventional Long-Term Products

June 8, 2009
Flagstar Bank, Troy, Mich., will no longer originate on a wholesale basis conventional products with a loan term longer than 30 years, according to a notice posted through the LendingArt messenger alert system.

This goes into effect on June 12; all of the loan applications affected must be locked by June 11. According to the posting, the following product types which may have terms of 35 or 40 years are affected: Fannie Mae 40-year fixed rate; Fannie Mae MyCommunityMortgage; Fannie Mae 3/1, 5/1 & 7/1 LIBOR adjustable-rate mortgages; Freddie Mac Home Possible; and Fannie Mae High Balance.

FBR Cuts Flagstar Earnings Estimate

April 27, 2009
Analysts at FBR Capital Markets have cut their earnings per share estimates at Flagstar Bancorp, Troy, Mich., citing higher credit costs for the company that will pressure capital levels.

Flagstar had a net loss to common stockholders for the first quarter of $67.4 million ($0.76 per share). But the company was able to successful raise new capital, including $566 million from private investors and the TARP program. Plus Flagstar expects to add $50 million of private capital during the quarter. FBR said the new capital is a positive for the company but would result in significant dilution to existing common shareholders. On the bad news side, the analysts said, is Flagstar's exposure to weak markets, namely California, Florida, Michigan and Atlanta, which have yet to show signs of stabilization. As a result, FBR expects credit losses to remain elevated. Like a number of banks, Flagstar benefited from a strong performance in the residential mortgage area. But the FBR report said, "Although Flagstar's mortgage banking revenues were strong this quarter, we expect the revenues to taper to more normalized levels in the coming quarters as spreads narrow."

Flagstar Vols Jump But Net Income Falls

April 22, 2009
Flagstar Bancorp Inc., Troy, Mich., saw its residential mortgage volumes increase to $9.5 billion in the first quarter from $5.4 billion the previous three months, but said that under its accounting methodology it had to take a net loss for the period.

Flagstar said it has adopted the fair value method of accounting for mortgages it originates for sale and thus cannot capitalize and defer recognition of loan fees as it had done previously; it also can no longer defer recognition of a portion of its expenses. It had $32.9 million in loan fees during the quarter and saw a gain on loan sales of $195.7 million. Flagstar also took a $158.2 million provision for loan losses in the first quarter. Nonperforming residential first mortgage loans increased from $432.6 million at the end of last year to $561.5 million at the end of the first quarter, while nonperforming commercial real estate mortgages increased from $164.4 million to $198.3 million during the same time frame. Overall, the company's net loss to common stockholders for the first quarter was $67.4 million ($0.76 per share), as compared with a loss of $10.6 million ($0.18 per share) for the same period one year prior.

Wholesaler/Retailer Picks Appraisal Firm

April 14, 2009
Flagstar Bancorp, one of the nation's largest residential wholesalers, has picked StreetLinks National Appraisal Services as one of its preferred vendors.

The Indianapolis-based vendor will offer evaluation services to Flagstar's retail branches as well as its brokers and correspondents. SLNAS says it is compliant with the new Home Valuation Code of Conduct (HVCC) which governs appraisal practices. Flagstar, which according to the Quarterly Data Report ranks ninth overall in residential fundings, is based in Troy, Mich.

Flagstar Reconfigures Wholesale Sales Operations

April 7, 2009
Flagstar Bank of Troy, Mich., will reconfigure its wholesale mortgage sales operations, going from 12 sales regions down to eight.

As part of the changes, Dave Bowers, executive vice president and national sales manager, will leave his post and move to Atlanta to manage Flagstar's new South region. His successor as executive vice president and national sales manager is Gregory Lutin. Mr. Lutin has been with Flagstar since 1994, serving in several management positions, most recently as senior vice president of the South division. He will relocate to Flagstar's headquarters in Troy. Other changes at Flagstar include Tim Kalaris managing the Northeast region, Linda Bissell remains as head of the Great Lakes region, Paul Wyner in charge of the North Central region, Rich Hoffman remains as regional manager of the Sunshine region, Rob Mally will oversee the Pacific Southwest region, and Mike Fowler and Kurt Mason are new managers of the Mountain and Northwest regions, respectively. The changes will be effective May 1.

Flagstar Reconfigures Wholesale Sales Operations

April 6, 2009
Flagstar Bank, Troy, Mich., will reconfigure its wholesale mortgage sales operations, going from 12 sales regions down to eight.

As part of the changes, Dave Bowers, executive vice president and national sales manager, will leave his post and move to Atlanta to manage Flagstar's new South region. His successor as executive vice president and national sales manager is Gregory Lutin. Mr. Lutin has been with Flagstar since 1994, serving in several management positions, most recently as senior vice president of the South division. He will relocate to Flagstar's headquarters in Troy. Other changes at Flagstar include Tim Kalaris managing the Northeast region, Linda Bissell remains as head of the Great Lakes region, Paul Wyner in charge of the North Central region, Rich Hoffman remains as regional manager of the Sunshine region, Rob Mally will oversee the Pacific Southwest region, and Mike Fowler and Kurt Mason are new managers of the Mountain and Northwest regions, respectively. The changes will be effective May 1.

Mortgage Stocks Nosedive

March 2, 2009
Mortgage stocks took a nosedive as the Dow Jones Industrial Average plummeted 242 points in Monday morning trading.

Citigroup saw its share price plummet 20%, while Flagstar Bancorp's stock dropped by 13.95%. Bank of America Corp. suffered a 14.18% decline in its stock price Monday afternoon. Mortgage insurance firms saw declines as well, with MGIC down 4.82%, PMI at 8.57% and Radian at 4.19%. GSEs Fannie Mae and Freddie Mac also took hits of 7.14% and 6.43%, respectively.

Most Mortgage Stocks See Percentage Declines Beyond Dow's

February 25, 2009
Mortgage stock prices the morning of Feb. 25 had taken a nosedive that, on average, was more pronounced than the Dow's decline of nearly 157 points, or 2.13%.

The move followed a moderate rebound the previous day. Freddie Mac's stock price had plummeted by 11.07%. Other companies to see significant drops in stock price include PMI at 19.22%, Radian at 17.7% and Triad Guaranty at 9.35%. Citigroup's stock price dropped, by 10%, as did Flagstar's, by 13.12%. On the flipside, AIG, which saw a substantial drop in its stock price on Tuesday, is one of the few companies had gone up (by 2.46%).

MBA Asks Congress for Government Backing of Warehouse Lines

February 3, 2009
The Mortgage Bankers Association Tuesday afternoon asked Congress to provide short-term government guarantees on warehouse lines of credit to address what it believes is a liquidity crisis facing non-depository residential funders.

The trade group also thinks it might be a good idea to allow Fannie Mae and Freddie Mac to buy participations in warehouse lines of credit, a move it thinks will add liquidity to the sector. In years past mortgage bankers -- and warehouse executives -- were adamantly opposed to allowing the GSEs to get anywhere near the warehouse niche. MBA claims warehouse lending capacity has shrunk to just $25 billion or so compared to $200 billion two years ago. "This sub-crisis is the result of a shortage of warehouse lines of credit, meaning independent mortgage bankers are doubly hamstrung to originate new mortgages threatening their viability," said MBA chief John Courson in written testimony before the House Financial Services Committee. According to exclusive survey figures compiled by National Mortgage News, there are just 10 or so active warehouse lenders compared to 30 two years ago. Many warehouse providers have either failed or closed down that line of business including most of the Wall Street firms that played in the space. Active warehouse firms include Horizon Bank, Flagstar, GMAC-RFC, National City, and a few others. MBA wants the government to provide federal guarantees on warehouse lines for 12 to 24 months -- but only on Fannie Mae, Freddie Mac and government-backed loans, which currently accounts for most of the market.

Flagstar Posts Loss but Boosts Mortgages

January 30, 2009
Flagstar Bancorp of Michigan, one of the few remaining wholesale residential lenders left, reported a net loss of $200 million in the fourth quarter, after taking $292 million in charges during the period.

In the fourth quarter, Flagstar originated $5.4 billion of residential mortgage loans, compared to $6.5 billion one year prior. For the full year, it funded $28 billion in home mortgages, a 9% gain from 2007. At year-end it serviced $55.9 billion, with a weighted average servicing fee of 33.3 basis points. In the fourth quarter of 2007 it lost $30.1 million. Among the items associated with the 4Q 2008 charges: an increase in the loan loss provision to ($176.3 million); a $270 million writedown on the value of its mortgage servicing rights (although this was mostly offset by hedging gains); a $16.4 million valuation adjustment; a $9.8 million reserve established to cover anticipated losses in its captive mortgage reinsurance arrangement; and an 'other than temporary' impairment of $43.6 million related to investment securities available for sale. Flagstar's full year loss was $257.3 million or $3.57 per share.

Equity Fund Invests $250 Million in Flagstar

December 18, 2008
Flagstar Bancorp Inc., Troy, Mich., a top 20 mortgage originator, will be receiving a $250 million investment from an affiliate of MatlinPatterson Global Advisors LLC, a private equity fund specializing in distressed control investments.

If completed, this will give MatlinPatterson a 70% equity stake in Flagstar. MatlinPatterson is to purchase 250,000 shares of a new issue of convertible participating voting preferred stock. When Flagstar shareholders approve an increase in the number of authorized shares of common stock, the preferred stock will convert to 312.5 million shares of Flagstar common stock at a price of $0.80 per share. In addition, Flagstar chairman Thomas Hammond and its vice chairman, chief executive and president Mark Hammond, will each invest $2 million and other members of the company's management may invest an additional $1 million at the same price per share at which MatlinPatterson is making its investment. Flagstar is seeking a "financial viability" exemption from the New York Stock Exchange. The deal is contingent on receiving this, as well as Flagstar receiving at least $250 million from the TARP Capital Purchase Program.

NYSE: Flagstar No Longer Meets Listing Standards

December 17, 2008
The New York Stock Exchange has informed Flagstar Bancorp Inc., Troy, Mich., that it no longer satisfied one of the exchange's standards for continued listing, namely that the closing price of its common stock was under $1 per share for 30 consecutive trading days ending on Dec. 9.

Flagstar has 10 days to notify the NYSE of its intent to cure the pricing deficiency. Under NYSE policy, to cure this deficiency, Flagstar's common share price and the average share price over a consecutive 30-day trading period must exceed $1 per share within six months following receipt of the notice. On Dec. 16, Flagstar's common stock closed at $0.60 per share; its 52-week range is $0.40 to $9.12.

Flagstar, a Top 20 Ranked Lender, Posts 3Q Loss

October 31, 2008
Blaming its performance on "several significant credit and asset disposition charges," Flagstar Bancorp Inc., Troy, Mich., lost $62.1 million ($0.79 per share) in the third quarter, compared to a net loss of $32.1 million ($0.53 per share) in the same period last year.

The company, which ranks 13th among all residential funders, according to the Quarterly Data Report, suffered $162.7 million (pre-tax) of credit and asset disposition charges during the quarter, including a $17.1 million decrease in loan administration income because of the failure by Lehman Brothers to honor a commitment to purchase $65 million in excess servicing. (Lehman filed for bankruptcy protection this fall.) In 3Q, Flagstar originated $6.7 billion in mortgages, an 18% decline from last year.

Flagstar Suspends Dividends

February 20, 2008
Flagstar Bancorp Inc., a residential mortgage lender based in Troy, Mich., has announced a suspension of dividend payments for the first quarter.

"Although we are seeing strong loan production, increasing gain-on-sale margins, and improved net interest margins, the board believes that it is prudent to preserve capital by suspending the dividend until the capital markets normalize and residential real estate shows signs of improvement," said Mark Hammond, chief executive officer and vice chairman of Flagstar. The company can be found on the Web at http://www.flagstar.com.

Flagstar Reports MSR-Linked '07 Loss

January 30, 2008
Flagstar Bancorp, Troy, Mich., the holding company for mortgage lender Flagstar Bank, has reported a net loss of $39.2 million ($0.64 per share) for 2007 due partly to a decline in the gain on sales of mortgage servicing rights.

In 2006, Flagstar recorded earnings of $75.2 million ($1.17 per share). The company's net gain on MSR sales totaled $5.9 million in 2007, down dramatically from $92.6 million in 2006, according to Flagstar's earnings statement. Mark Hammond, president and chief executive officer of Flagstar, said the company will focus on "managing through" possible further real estate declines and a weakening economy, but pointed to what he called positive trends and fundamentals. "These include our increasing market share for mortgage originations, increased residential loan production, improving gain-on-sale spreads, the potential for higher Fannie Mae, Freddie Mac, and FHA loan limits, and increased credit spreads and lower funding costs, which should result in an improving net interest margin," he said. For the fourth quarter, Flagstar reported a net loss of $30.1 million ($0.50 per share), compared with earnings of $6.9 million ($0.11 per share) a year earlier. Flagstar can be found online at http://www.flagstar.com.

Flagstar, Irwin Sink on Heavy Losses

October 31, 2007
The stocks of Irwin Financial Corp. and Flagstar Bancorp Inc. were trading lower Wednesday morning after both firms reported third-quarter losses related to home loans.

Irwin lost $18 million, including "discontinued operations," in the third quarter, compared with net income of $5.5 million in the second quarter. Chairman and chief executive officer Will Miller said the "mortgage crisis continued to take a heavy toll on our results." Irwin significantly increased its reserve in the third quarter for future home equity losses. Flagstar Bank, which reported a $32.1 million loss for the third quarter, said a decrease in gains on the sale of mortgage servicing rights, losses on loan sales, and an increase in the provision for loan losses was responsible for the downturn. The companies can be found online at http://www.irwinfinancial.com and http://www.flagstar.com.

Flagstar Goes Live With E-Mortgages

October 4, 2007
Livonia, Mich.-based Flagstar Bank has gone live with mortgage closings using electronic signatures, and was preparing to sell its first e-mortgage the afternoon of Oct. 4.

The most common misconception about e-closings is that the e-signed closing requires additional hardware, but Flagstar is doing a click-sign that can be done with an everyday computer mouse. Beyond the benefits that go along with e-signing itself, as part of post-closing, Flagstar automatically pre-populates the necessary data to answer all needed post-closing questions. Most of those questions are cleared automatically by the data transfer itself and come up with a "cleared" message to the post-closer. This eliminates the need for manual post-closing and mitigates the chance of buybacks by the investor. Flagstar says it is committed to e-mortgages as a business philosophy and will start small, but quickly ramp up to doing heavy e-closing production.

Flagstar's Warehouse Lawsuit Dismissed

November 22, 2006
Flagstar Bancorp Inc., Troy, Mich., has had its lawsuit seeking recovering on a fidelity bond issued by the Chubb Group of Insurance Cos. dismissed by a federal judge, in a case involving mortgage warehouse lending fraud.

The incident at the heart of the matter was discovered in March 2004. Flagstar discovered that a lender named Amerifunding fraudulently obtained a series of warehouse loans totaling $22.4 million. Flagstar was able to make a recovery of $13.4 billion by a seizure of cash and real property and received additional money through civil litigation. Flagstar filed suit against Chubb to cover its remaining loss after the insurer denied the fidelity bond claim under the forgery provision. "We carefully considered our position in this matter and we strongly disagree with the result in this case," said Mark T. Hammond, vice chairman and chief executive of Flagstar. "We believe that the court overlooked the inherent value in the promissory notes, which in this case were forged, and therefore our fidelity bond claim should have been paid regardless of the validity of the underlying collateral." A spokesman for Chubb said the company has a policy of not commenting on matters under litigation. Flagstar also has a suit against First Collateral Services, a previous warehouse lender to Amerifunding, alleging it misrepresented the fraud situation when providing a reference to Flagstar.

Encompass Integrates to Flagstar Platform

September 20, 2006
Flagstar Bank and Ellie Mae have announced MISMO-compliant integration of Ellie Mae Encompass into Flagstar's Digital Document Transfer platform.

The integration enables one-click electronic submission by brokers and correspondents of underwriting and closed-loan packages directly into Flagstar's electronic document management systems. According to the companies, Dublin, Calif.-based Ellie Mae is the first to use the advanced features of Troy, Mich.-based Flagstar's Digital Document Transfer platform. Transfer of SMART Document levels 3 and 4 (as defined by the Mortgage Industry Standards Maintenance Organization) allows for sound exchange of data and documents, the companies said. The platform's secure Web service enables two-way communication and immediate feedback of transfer success. More information about the Digital Document Transfer platform is available at ddtinfo@flagstar.com.

Flagstar Expanding CRE Ops

September 19, 2006
Flagstar Bank, Troy, Mich., has announced the expansion of its commercial real estate lending operations to 16 additional states, mostly in the West, the Midwest, and the South.

Flagstar said it expects to offer different forms of commercial real estate financing, including land development, construction, "permanent end-financing," and loan participations. "Over the years, we've developed an expertise in commercial real estate lending in the states where we have a banking presence," said Peter Smith, head of Flagstar's consumer and commercial lending operations. "Now we want to bring that expertise to other states." Traditionally, Flagstar Bank has had a presence in Michigan, Indiana, and Georgia. The bank said it expects its national network of residential mortgage brokers to be a good source of referrals, as they know "what the hot spots are for commercial real estate." Flagstar can be found online at http://www.flagstar.com.

Flagstar, BeesPath Empower Closing Agents

February 8, 2006
Flagstar Bank, Troy, Mich., has announced the integration of its Digital Document Transfer platform with BeesPath Inc.'s RecordsDirect to create what it calls the first system to extend image delivery services to closing agents in the mortgage industry.

The two products work together to provide "virtually immediate delivery and processing" of closed loan documents and to enable closing agents to share the benefits enjoyed by lenders and investors, Flagstar said. "Today, unsigned loan documents are being delivered electronically to closing agent before a loan closes," said Todd Hougaard, president of Richmond, Utah-based BeesPath. "This integration allows signed documents to be delivered electronically post-closing." The companies can be found on the Web at http://www.flagstar.com and http://www.beespath.com.

Flagstar to Lower '02-'04 Earnings

January 25, 2006
Flagstar Bancorp Inc., Troy, Mich., has announced that it will restate earnings for 2002, 2003, and 2004, resulting in an overall $5.9 million reduction in net earnings.

The company said the restatement was necessitated by the discovery of errors in the computation of state tax liabilities that understated the liabilities by $9.5 million. The restatement will reduce net earnings by approximately $2.5 million for 2002, approximately $2.4 million for 2003, and approximately $1.0 million for 2004, Flagstar said. The mortgage lender reported net earnings of $79.9 million ($1.25 per share) for 2005, compared with $142.7 million ($2.22 per share) for 2004. (The 2004 figures reflect the aforementioned restatement, the company said.) Flagstar can be found online at http://www.flagstar.com.

Flagstar Sub Issues $600M Securitization

December 9, 2005
Flagstar Bancorp Inc., a major residential mortgage originator based in Troy, Mich., has reported the private placement of a $600 million securitization of asset-backed notes by Flagstar ABS LLC, a wholly owned subsidiary of Flagstar Bank FSB.

The notes, issued through Flagstar Home Equity Loan Trust 2005-1, consist of one class and are backed by home equity lines of credit originated and serviced by Flagstar Bank, the company said. The deal, placed with institutional buyers, used a prefunding structure under which approximately $450 million worth of HELOCs were sold Dec. 8 and approximately $150 million more will be sold within 90 days. Flagstar can be found online at http://www.flagstar.com.

Zacks Gives Flagstar Thumbs Down

November 2, 2005
Zacks.com has given Flagstar Bancorp Inc., a major mortgage lender based in Troy, Mich., its #5 (Strong Sell) rank.

Zacks, the online component of Zacks Investment Research, Chicago, said Flagstar has fallen short of earnings expectations for five consecutive quarters. It recently reported third-quarter earnings of $0.15 per share, far below analysts' expectations of $0.42 per share, Zacks.com said. "Three of the six covering analysts reacted by cutting their full-year forecasts," Zacks said. "The new consensus forecast for 2005 profits of $1.33 per share is 47 cents below the level of two months ago." The online research company can be found on the Web at http://www.zacks.com.

Flagstar Introduces Digital Doc Platform

October 24, 2005
Flagstar Bank, Troy, Mich., has announced the general availability of its Digital Document Transfer platform and specification for electronic document exchanges through six mortgage technology companies.

The six companies partnering with Flagstar are Advectis Inc., Investor Purchase and Delivery Services Inc., Pyramid Solutions Inc., Stewart Mortgage Information, Tradewinds Mortgage Document Preparation Co., and VirPack. The partners have enhanced their electronic document management products or services to allow for the creation or acceptance of SMART (securable, manageable, archivable, retrievable, and transferable) documents and electronic packages that conform to the DDT specification, Flagstar said. The specification is based on the SMART document format established by the Mortgage Industry Standards Maintenance Organization. Flagstar can be found online at http://www.flagstar.com.

Flagstar Adopts VirPack Direct

August 18, 2005
Vienna, Va.-based VirPack has announced that Flagstar Bank, Troy, Mich., has begun using an enhanced version of its Virpack Direct electronic image loan delivery system.

VirPack Direct conforms to Flagstar’s electronic image loan delivery specification and supports delivery to Flagstar's paperless loan processing systems for both correspondents and brokers, VirPack said. Now Flagstar's correspondents and brokers can deliver fully indexed images instead of paper loan packages to reduce costs and cycle times. VirPack said loans identified for delivery to Flagstar are immediately retrieved from the VirPack system, prepared and electronically delivered in a secure fashion. Direct is integrated with VirPack's imaging systems, which provide barcoding, scan capture, and electronic document management applications designed specifically for the mortgage industry. VirPack Direct is free to VirPack customers. The company can be found online at http://www.virpack.com.

Flagstar Ex-CFO Resigns From Board

June 23, 2005
Michael W. Carrie, former chief financial officer of Flagstar Bancorp Inc., a major mortgage lender based in Troy, Mich., has resigned from Flagstar's board of directors and entered into a consulting agreement with the company.

Flagstar said Mr. Carrie also resigned from the board of directors of its wholly owned subsidiary, Flagstar Bank FSB, and that he will consult with Flagstar through March 2006 to assist in the transition of the successor CFO. In addition, the company announced the appointment of Brian Tauber as an independent member of both Flagstar boards to fill the vacancies resulting from Mr. Carrie's resignation. Mr. Tauber is president and chief executive officer of Carolina Precision Plastics. Flagstar, which operates home loan centers in 27 states, can be found on the Web at http://www.flagstar.com.

2 Lenders, 6 REITs Delay 10-Ks

March 17, 2005
Two mortgage lenders and six real estate investment trusts have reported a 15-day delay in the filing of their annual Form 10-K reports with the Securities and Exchange Commission.

Accredited Home Lenders Holding Co., a San Diego-based mortgage banker, said the delay resulted from "the additional demands on management and other resources in complying with both the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the shortened 10-K filing deadline applicable to Accredited as an accelerated filer." Flagstar Bancorp, a mortgage originator based in Troy, Mich., also cited Sarbanes-Oxley requirements. The REITs seeking a filing delay are Cousins Properties Inc., Atlanta; Essex Property Trust, Palo Alto, Calif.; First Industrial Realty Trust, Chicago; General Growth Properties, Chicago; Impac Mortgage Holdings, Newport Beach, Calif.; and The Macerich Co., Santa Monica, Calif. Several cited the need to review methods of accounting for leases and leasehold improvements in the light of a Feb. 7 letter from the SEC to the American Institute of Certified Public Accountants. In the case of Impac, the REIT said its commitment of resources to restate earnings for prior periods prevented it from completing a report on its internal control over financial reporting, delaying the completion of an audit by its independent auditor.

Flagstar Reports Financial Revisions

March 14, 2005
Flagstar Bancorp, Troy, Mich., has announced a $0.04 per share reduction in its fourth-quarter earnings to defer a gain from an interest rate hedging position it had terminated.

The change will result in corresponding increases of approximately $0.02 per share in 2005 and 2006, the company said. Flagstar also reported an unrelated adjustment to its retained earnings to correct a cumulative overstatement of interest accrued on its $10.2 billion portfolio of mortgage loans. The latter adjustment will not affect the company's 2004 earnings or its 2005 earnings guidance, the company said. Flagstar can be found online at http://www.flagstar.com.

HUD Fines NJ Wholesaler

October 12, 2004
The Department of Housing and Urban Development has fined Chapel Mortgage Corp. $100,000 for poor underwriting practices and failing to detect property flipping, according to a public notice of HUD's last enforcement actions.

The Rancocas, N.J., wholesale lender maintained that it was the victim of fraud perpetuated by one of its former correspondents. But without admitting fault or liability, the wholesaler agreed in August to pay the $100,000 administrative fine and indemnify HUD for any losses on 19 Federal Housing Administration loans. The Oct. 7 Federal Register notice also reveals that HUD's Mortgagee Review Board fined Flagstar Bank FSB $198,000 for processing violations in March. The MRB cited the Troy, Mich.-based thrift for failing to remit up-front mortgage insurance premium payments on 1,310 loans on a timely basis and failing to submit loan endorsements on 1,035 loans within 60 days of the closing. Flagstar also agreed to indemnify the FHA for any losses on 13 FHA loans. The MRB took enforcement actions against 66 FHA lenders, according to the Oct. 7 notice, some dating back to September 2003.

Flagstar, Fannie Unveil $100B AH Alliance

August 26, 2004
Flagstar Bank and Fannie Mae have announced a five-year $100 billion affordable housing initiative that will benefit underserved and multicultural borrowers nationwide.

Announced in Pontiac, Mich., the alliance is part of Fannie's "American Dream Commitment" for Michigan, a seven-year, $50 billion investment aimed at helping finance affordable housing for 500,000 families across the state, as well as part of Fannie's nationwide commitment to tackle the toughest housing problems in America, including efforts to raise the national minority homeownership rate to 55% by 2010. Flagstar will offer mortgage loans for single-family homes, including two- to four-unit properties. Besides agreeing to purchase these loans, Fannie said it will assist Flagstar to identify business partners, develop outreach efforts, and provide various emerging-market products. Flagstar, based in Troy, Mich., can be found online at http://www.flagstar.com, and Fannie Mae can be found at http://www.fanniemae.com.

Fannie Moves to Prop Up MH Sector

February 10, 2004
In an effort to prop up the sagging manufactured housing sector, Fannie Mae has reinstituted a 5% down, 30-year loan program for factory-built houses with nine lenders on a negotiated basis.

The big secondary-market institution also pledged to work with the nine companies to transform the manufactured housing market by developing processes and procedures that lower the risk associated with mortgages on houses that are assembled in a factory, trucked to a building site, and fixed to the land. "This is both more and better," said Rep. Barney Frank, D-Mass., in praising the initiative. Fannie Mae invests in manufactured housing loans, but stepped back last year because of problems in the business. Shipments have fallen to their lowest level in decades, and many manufacturers and retailers have exited the market or declared bankruptcy, largely because of high delinquencies and loan losses. The number of repossessed and foreclosed manufactured homes also is said to be at record high levels. The nine lenders -- AgFirst Farm Credit Bank, Flagstar Bank, GMAC Manufactured Housing, Huntington Mortgage Group, Origen Financial, RBC Mortgage, 21st Mortgage, Vanderbilt Mortgage, and Washington Mutual -- have all demonstrated the "high levels of expertise necessary to understand the property, titling, appraisal, and servicing issues associated with manufactured homes," Fannie Mae said.

Flagstar Picks EagleCert Valuation Product

June 18, 2003
Flagstar Bank has picked eAppraiseIT LLC's EagleCert Insured Valuation product to handle portfolio loans generated through its nationwide network of correspondent lenders and independent mortgage brokers, eAppraiseIT has announced.

Michigan-based Flagstar said the program -- for which eAppraiseIT cooperated in creating a proprietary workflow system -- will lower costs and produce efficiencies for the bank. The workflow component uses embedded lender rules to automate the process of product selection by first using EagleCert automated valuation models and augmenting them with other products as needed. Licensed appraisers are used for desktop appraisals and 2055 drive-bys. Turnaround time for all EagleCert transactions is less than 24 hours, according to eAppraiseIT, which is a joint venture between The First American Corp. and LandAmerica Financial Group. The Flagstar implementation is expected to be completed by the end of June. The companies can be found online at http://www.flagstar.com and http://www.eappraiseit.com.

Flagstar Declares Stock Split

April 24, 2003
Flagstar Bancorp, Troy, Mich., the holding company for mortgage lender Flagstar Bank, has declared a 2-for-1 split of its common stock in the form of a stock dividend.

The dividend will be paid May 15 to stockholders of record at the close of business on April 30, the company said. Cash will be paid in lieu of fractional shares. Flagstar operates 92 bank branches in Michigan and Indiana, 101 loan origination centers in 21 states, and 14 regional correspondent lending offices across the United States. It can be found online at http://www.flagstar.com.

Ellie Mae, BofA Join Forces

December 18, 2001
Ellie Mae Inc., Pleasanton, Calif., has formed an alliance with Bank of America that will see the bank's wholesale lending website, Mortgage Network, interfaced with Ellie Mae's ePASS Business Center.

The relationship will give users of Calyx, Contour, and Genesis loan processing software -- who represent 90% of all mortgage originators in the United States, Ellie Mae says -- access to Bank of America loan registration, loan status, custom pipeline reporting, and locking capabilities. Users of Ellie Mae ePASS (Electronic Processing and Submission System) will find the BofA brand and link on the ePASS home page. Ellie Mae has a number of relationships with national lenders that also provide ePASS users access to their loan products, including Flagstar Bank, GreenPoint Mortgage, Impac Lending, New Century Mortgage, and WMC Direct. The company's website is located at http://www.elliemae.com.

Flagstar Names New CEO

November 29, 2001
Mark T. Hammond, president and vice chairman of mortgage lender Flagstar Bancorp, Troy, Mich., has been named chief executive officer of Flagstar effective Jan. 1.

The opening was created when the company's board of directors accepted the resignation of Thomas J. Hammond as CEO. Thomas Hammond will remain as chairman of the board, and will oversee strategic decision-making, Flagstar said. The company can be found on the Web at http://www.flagstar.com.

Flagstar Plans National Retail Ops

September 10, 2001
After building a nationwide wholesale operation, Flagstar Bank FSB is planning to expand its retaillending operation nationwide.

"Flagstar spent the 1990s developing its wholesaleand correspondent businesses," Flagstar president and vice chairman Mark Hammond told institutional investorsat a Friedman, Billings, Ramsey conference in Washington. "We intend to expand our retail mortgage originationsover the next five years to all 50 states." This expansion could lead to the development of some 400-500 retailoffices in every major metropolitan area. However, Mr. Hammond said Flagstar intends to use a net branching orfranchising approach to avoid the cost of brick-and-mortar leases. Flagstar, a thrift based in Troy, Mich., has15 wholesale offices nationwide with sales representatives in all 50 states and 55 retail offices in eight states.Mr. Hammond told investors that Flagstar will originate $30 billion in residential mortgage loans this year, upfrom $9.9 billion in 2000. Originations during the first half of the year totaled $13.6 billion. The company'swebsite address is http://www.flagstar.com.

Employment Creeps Upward

September 7, 2001
Employment in the mortgage industry edged up by less than 1% in August as lenders anticipate another surge in refinancing activity.

The U.S. Bureau of Labor Statistics reported that jobs in the mortgage banker/broker sector increased from 321,800 in July to 324,600 in August. Although mortgage companies continue to be cost conscious in taking on new hires, mortgage rates have dipped below 7% several weeks ago and it is expected to spur more refinancings and homes sales. Flagstar Bank president Mark Hammond told an investor conference, sponsored by Friedman, Billings, Ramsey, on Friday that he expects origination volumes will jump in the second half this year. During the first half of this year, the Troy, Mich.-based thrift originated $13.6 billion in residential mortgage loans through its retail and wholesale units. By the end of the year, Mr. Hammond said originations will total $30 billion and Flagstar will increase its market share from 1.5% to 1.8%.

Flagstar Announces Stock Split, Move to NYSE

June 27, 2001
Flagstar Bancorp, a mortgage lender based in Troy, Mich., has announced a stock split and a moveto the New York Stock Exchange.

Flagstar's board approved the three-for-two stocksplit, to be paid on July 12 to shareholders of record on July 6. The board also authorized the company's commonstock to begin trading on the NYSE on July 13 under the ticker symbol "FBC." At the same time, the boarddeclared a cash dividend of $0.07 per share based on the new share count at July 13, which will be paid to stockholdersof record at the close of business July 17. Flagstar has been listed on the Nasdaq under the symbol "FLGS"since its initial public offering on April 30, 1997. The company's website is at http://www.flagstar.com.

Flagstar Expects Reduced 3Q Earnings

September 23, 1999
Flagstar Bancorp Inc., Bloomfield Hills, Mich., has announced reduced earnings expectations for the third quarter and the year in connection with a recent loss on the sale of mortgage loans by its subsidiary, Flagstar Bank FSB.

"Net earnings from the retail banking and mortgage servicing operations continue to provide profitable returns to the company, but the higher and more volatile interest rate environment has caused a reduction in mortgage banking earnings," the company said. "These reduced earnings were caused by a $3.8 million loss on the sale of newly originated mortgage loans sold to the secondary market." Third-quarter earnings are expected to be lower than analysts' expectations and lower than earnings in the previous quarter and the third quarter of 1998, the company said. The company's website address is http://www.flagstar.com.

Fannie Forms Alliance with LION

June 3, 1999
Fannie Mae and Lenders Interactive Online Network today announced the availability of Desktop Originator (DO) via the Internet.

Additionally a "DO Center," which describes the Desktop Originator process and how brokers and lenders may sign up for Internet access to Desktop Originator, has been created on LION's website. Today's announcement comes after the program's pilot, in which Homeside Lending, Sunbelt, Flagstar, Western Sunrise as well as Margo participated, offering their sponsored brokers Internet access to Desktop Originator. LION's Website address is http://www.lioninc.com.

Principal Buys $4B in Servicing

February 9, 1999
Principal Residential Mortgage Inc., Des Moines, Iowa, has purchased $4 billion of servicing rights for Fannie Mae/Freddie Mac home loans from Flagstar Bank FSB.

The transfer of servicing rights, which represents a 9% increase in Principal's servicing portfolio, will be completed during the first and second quarter of 1999. Principal, which purchased ReliaStar Mortgage Corp. in July 1998, currently services 480,000 loans with a balance of $42 billion.

$1B Michigan Lender Closes Doors

January 26, 1999
MCA Mortgage Corp., Southfield, Mich., a $1 billion producer of conventional and subprime loans, has closed its doors.

Little is known about why the company failed, but already the firm's retail branches are being sold to other residential originators. Michigan firms Flagstar, Towne Mortgage, and DMR Mortgage have reportedly taken over some of MCA's locations. Roughly 40% of its production is tied to the subprime sector. Sources note that MCA was involved in purchasing and renovating dilapidated Detroit homes as a side business. The firm that MCA was working with on the renovations, RIMCO Financial, is based in Detroit. MCA and RIMCO officials could not be reached for comment at deadline time. When MCA failed, RIMCO laid off 100 workers. One mortgage official noted that MCA's warehouse lenders had frozen its "lines" because of concerns about the underlying collateral. Before it failed, MCA employed more than 900 workers through 40 branch offices nationwide. As for market share, MCA was a top 20 lender in the Grand Rapids area, according to government figures compiled by the Database Products Group, a MortgageWire affiliate.

IndyMac Sells $3B in Servicing

November 20, 1998
IndyMac Mortgage Holdings Inc., Pasadena, Calif., has sold a $3 billion servicing portfolio that it purchased at the end of September.

The buyer and price were not disclosed. The publicly traded IndyMac bought the $3 billion from Flagstar Bank, Bloomfield, Mich. IndyMac president Michael Perry said his company sold the servicing -- after owning it for a short period of time -- to preserve cash. Mr. Perry noted that his company is on sound financial footing but will trim more of its $9 billion servicing portfolio. "Ideally, we'd like to get our servicing down to $5 billion to $6 billion or so and keep it at that level," he said. IndyMac, a large 'Alt A' lender, has been hurt, in part, by the liquidity crisis that damaged the subprime and commercial sectors. Besides Alt A, its product lines include jumbo, build-to-perm, construction, subprime, and warehouse lending. Analysts have lumped the company in with other subprime firms, even though subprime and commercial do not represent a large share of its overall volume.